Explaining HP and XP to a Non-Gamer

HP and XP may seem like alien concepts to a non-gamer, like arbitrary meters that which have no basis in reality. This is somewhat true, but that's because HP and XP aren't based on real world concepts, but on narrative concepts. I like to explain them to non-gamers (or new gamers) like so:

Think of "the story" in a game as a kind of "god". However, unlike most gods, it doesn't have a specific personification in-universe. Instead, the story is a nebulous "cosmic will" with a certain "plan", and wants nothing more than to elevate characters that make the story itself more interesting and epic. When the story doesn't like the way events unfold in its universe, it either prevents them from continuing in that way or requires restarting the story's plan from a certain point. The story's only other ability is to grant boons to characters that help fulfill the story's plan.

In a game's story, a character's Hit Points (HP) are a measure of their remaining amount of "cosmic luck". That is, how much luck they have in the grand scheme of things as granted by the will of the story. Every time you hear "HP", think "cosmic luck". Every time something attacks the character, the character tries to avoid becoming seriously injured. That is, when the character narrowly dodges that serious injury, dodging that injury consumes some of their "cosmic luck". As their "cosmic luck" runs low, they become at greater and greater risk of "their luck running out". Their luck running out may be represented in that game as falling unconscious, becoming winded, or even starting to bleed to death.

All "healing" effects in the universe's story may be doing some actual curative minor effects or helping the character recover from further serious injury, but most of what they're actually doing is "restoring cosmic luck". Healing effects make it more plausible that the character could shrug off or dodge a potentially-grievous injury. Auxiliary effects that come with an attack (such as poison) still work within this understanding of HP because every attack is only narrowly dodging a grievous injury, so a scratch or other minor injury could still have happened from an attack that would bring on that auxiliary effect.

A character's Experience Points (XP) are a measure of their growing "cosmic importance". That is, how important they are in the grand scheme of things. Every time you hear "XP", think "cosmic importance". Every time a character experiences something relevant to the story, the character is becoming slightly more important in-universe to the overall story. As a result, the story takes more of an interest in that character on a cosmic scale. Because the story is taking more interest in you, it rewards you with more "cosmic luck" along with other benefits relevant to the story. When it grants a character these new benefits, it's called "leveling up". "Levels" are just a numeric measure of how much the story (as a cosmic entity) is invested in that character's effects on the story's plan. The story wants to see what you'll do, and wants to guide you along towards meeting its own needs.