What makes a good story? Is it the character build up? The plot? The author's writing style? How the reader imagines the story?

Yup -- those are the same things I sort of interpreted from the book.
:)
And the movie "The Innocents" leaves interpretations open also! No clear definitive explanations. And very scary to me, like I said, ha!

Hi Nom de Plume~ Your thoughts and knowledge on this topic are very appreciated.  I see how all those play beautifully in your examples.  I have already cut and pasted my question to documents in gmail.  This way I can refer back to the suggestions made today. :) :)
Thanks again! 

Hi Merlin :)
I'd be interested to read the answers that come back to you via gmail.
Are you more interested in reading, or writing, or perhaps both equally?
There are lots of online sites for writers - so many that one can choose the genres, specialities and literary levels. They give heaps of great advice about writing and often mention the foremost exemplars and their works.
My nearest village happens to have a great second-hand bookshop - often full of literary classics at bargain prices. I read the first page, the last, and one at random from somewhere near the middle. This quickly gives me an idea of whether I will find it interesting, or whether its something from which I can learn. 
Am currently reading A. S. Byatt's Possession and loving it. Hoping her style will infuse me by osmosis.