Question

What is the ultimate goal of Hinduism?

Answer

To be frank, there is no single ultimate goal of Hinduism. Why? Because, Hinduism has different philosophical systems and even within different systems there are different schools of thought. Every school of thought has its own ultimate goal or objective defined for life which contradict to one another. Hence, there is no single ultimate goal that is shared by all Hindus. So the true goal of Hinduism is determined and dependent upon the school of thought one follows.

Many would say the four purusarthas (dharma, artha, kama and moksha) are the objective of Hinduism. Well, while that's mostly true, when we come to the bhkati school of thought, they are rejected outright from the beginning. Take Shrimad Bhagavatam for example:

dharmaḥ projjhita-kaitavḥ — Completely rejecting all religious activities (dharma, artha, kama, moksha) which are materially motivated, this Bhāgavata Purāṇa propounds the highest truth, which is understandable by those devotees who are fully pure in heart. [SB - 1.1.2]

Let's consider the Vedas, upon which Hinduism is mostly based. The Vedas itself consist of mutually opposing sections. The Karma Kanda suggests methods and ways to perform sacrifice etc. to attain heaven and other higher planes but the Jnana Kanda suggests to go beyond all these rituals and realize the true Self. So what will one chose? It simply depends upon the nature of the people:

Thus, due to the great variety of desires and natures among human beings, there are many different theistic philosophies of life, which are handed down through tradition, custom and disciplic succession. There are other teachers who directly support atheistic viewpoints. [SB - 11.14.8]

Hinduism is the natural religion. It is because it takes into account the real nature of people (categorises them into satva, rajas, tamas) and instead of imposing one single way for all, it suggests different ways for people of different nature and different needs. Hence, some people worship gods, perform rituals etc. to accumulate punya and go to heaven, while some others gain knowledge, realize the true Self or worship the Supreme either with or without a form:

Men in the mode of goodness worship the demigods; those in the mode of passion worship the demons; and those in the mode of ignorance worship ghosts and spirits. [BG - 17.4]

Reason behind rituals

Hinduism is not only a religion of hereafter, but also a religion focused on the present which you can say as a way of life. So apart from different philosophies that preach the absolute truth, there are also branches of knowledge in it like Jyotisha, Yoga, etc. which deal with removing obstacles, pain, etc. in this life. So many people although are not interested in the ultimate objective of life, are certainly interested in living a happy life here with all material comforts. So they perform many small and big rituals for that purpose which are supposed to bring auspiciousness, increase wealth, remove obstacles, etc. and thus make one happy. Due to maya or ignorance people do not know where the true happiness is. Hence, they focus on the superficial aspect of Hinduism:

O best among men, the intelligence of human beings is bewildered by My illusory potency, and thus, according to their own activities and whims, they speak in innumerable ways about what is actually good for people. [SB - 11.14.9]

Some say that people will be happy by performing pious religious activities. Others say that happiness is attained through fame, sense gratification, truthfulness, self-control, peace, self-interest, political influence, opulence, renunciation, consumption, sacrifice, penance, charity, vows, regulated duties or strict disciplinary regulation. Each process has its proponents. [SB - 11.14.10]

Reason behind narrating stories

Apart from people who are only interested in the materialistic mode of life, there are also people who are interested in God and the higher goods. But they may not be spiritually advanced. For such people the activity and pastimes of God and His many incarnations as described in Ramayana, Mahabharat, etc. provide faith, belief and interest. By hearing God's activity and pastimes through stories they obtain devotion through hearing which is known as shravana bhakati Hence, many scriptures describe the benefit of at least hearing or reading God's activities in it if one is not able to do anything else spiritual. As hearing stories is easy and doesn't require much effort, many persons narrate them and give pravachan etc. which others listen. But this is not the essence of Hinduism. Neither by giving pravachan (discourses) nor by listening to stories God or the Self is achieved:

The Self is neither obtained through discourses, nor through much hearing and not even through knowledge and intelligence. [Katha. Up. - 1.2.23]

Narrating and hearing stories is only good in the sense that something is better than nothing.

Is Hinduism really 'just a way of life'?

No, it's not. It's way more than that. How? Because when we say just a way of life we mean life on earth alone, or any other higher material plane. But Hinduism is not just limited to that. Not only it shows the ways up, but also it preaches the real blissful nature of our true Self and motivates us to attain that supreme goal going where one will never have to come back here again. So it's not just a system that shows how to live life here, but also states the value of human life and urges us to make the best use of it:

uttiṣṭhata jāgrata prāpya varānnibodhata [Kath. Up - 3.14]
— Arise awake and understand the boon (of human life) you have attained.

The doors of liberation are opened wide to one who has achieved human life. But if a human being simply devotes himself to family life like the foolish bird in this story, then he is to be considered as one who has climbed to a high place only to trip and fall down. [SB - 11.7.74]

To sum it up philosophically

Philosophically, to sum it up, most systems in Hinduism (Nyaya, Samkhya, Yoga.. .the five) consider dukha nivritti (avoiding suffering) as the goal of life and so they invent and preach various ways for this. But the Vedanta school of thought preaches ananda prapti (attaining bliss) is the ultimate goal of life as by attaining bliss suffering will itself cease. And it shows attaining God, who Himself is always blissful, as the only way of attaining such ever lasting bliss. But then as God is both with and without form and qualities, there are different methods and schools of thought regarding this.

To sum it up in one line, attaining eternal happiness or bliss, which is synonymous with God, moksha, liberation, etc. is the ultimate objective that every one shares, but the definition of God, moksha, etc. drastically changes by the school of though one follows.

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