How are characters developed in the passage from pages 31-33 in The Great Gatsby?
The characters are shown in this section to be rather shallow. Myrtle in particular is depicted as being insincere.
When she is given a compliment on her dress, she rejects the compliment and says that the dress is just an old thing that she throws on from time to time. Knowing that Myrtle is here on Tom's dime, as it were, we know also that this dress is special and she could not afford it without Tom's help.
Myrtle's insincerity is an important part of her character. She has aspirations that she does not wait to live out, though this means that she is doing some "play acting" to achieve this end as she does in this scene.
The other characters fare somewhat better than Myrtle here, but Tom is shown in his gruffness and his hostile indifference to the concerns of others and to culture. He sneers at the artist, Mr. Mckee. Tom's sense of superiority is reinforced in this passage and is a significant part of his character (making empathy with him very difficult).
The derision that Tom displays is approved of by Catherine, Myrtle's sister. The little cabal in New York is thoroughly tawdry, slightly tinged by what the players see as a positive fantasy, and, to the reader, clearly in bad taste.
In all this, Nick has little to no part, merely observing the bad behavior of his hosts.