“According to an uncovered script, Sally had once been the brightest star in the sky, even more than those that surrounded her.”

“Despite having a written origin, Eddie had never stated the correct name of where he came from through out the show's run. The running joke often had him stating a place that did not exist, followed by an admission to misremembering it as a place he delivered to as opposed to a place he lived.”

“Barnaby B. Beagle was the resident jokester who left his life on the farm to move to Home, of which he joked as being “The Big City.””

“Frank does not have any known information regarding his origins prior to moving into Home when compared to the others.”

Some of the residents have backstories that come from this world already, the forest predominantly. But these residents have come from outside the WH world or have unknown backgrounds. My theory is that Wally and Home have been bringing people into their world starting with Barnaby and ending with Eddie as their most recent “resident”. Perhaps the people were in a low in their life and Wally offered them an escape: a colorful world where everyone is friends. But when they wanted to leave, Wally and Home wouldn’t let them.