Sadras
Legend
You know, I can see a situation in my current campaign where this could work out quite well; I could have them do this for the city where they seem to have ended up basing themselves.
The only thing is, I'd have to specify the NPCs be "minor" - merchants, innkeepers, commoners, minor guild functionaries, etc. and nobody of any significant class level - as most of the major ones are already done and quite a few have already entered play as NPCs. I'd also have to specify or at least strongly encourage Human-only as it's a mostly-Human place.
(of my four players, I'm ironclad sure two would be all over this but the other two might not touch it with a barge pole)
I would probably also add some constraints on these 5 PCs for setting purposes (race and such like), but also to deter the metagame PCs having an armourer, an alchemist guy, a sage guy, a bowyer/fletcher, a gem guy...etc. I do not mind a contact or two, but it isn't necessary to turn every roleplaying opportunity into muchkinism. I'd prefer variety - a possible love interest, a happy drunk, a mischievous street urchin, a newly married couple, an idealistic acolyte, a recent widow, out-of-luck merchant, a pushy flower vendor, a musical duo, a retired falconer, a generous aristocrat, a lascivious innkeeper, a miserable midwife, bookworm-y town guard, an alcoholic sage, a roguish tradesman, a droll linguist, a burly dressmaker...etc
Like @Sadras , I'd likely also have trouble working them in to play on any regular basis; not because I'm running an AP but because they're pretty much only ever in town during downtime. But even if I didn't work them in, posting write-ups on each in the online town gazetteer would add to the 'depth'.
I might have been unclear, maybe - I said I won't have trouble working them in.