Hi. I have two questions.

Suddenly I had a reason to live. I felt great relief, and thought it doesn't really matter now if you flunk your exams. And I was hanging out with some very smart people, so I wasn't looking forward to flunking.

--- Does it mean that because he was hanging out with smart people there was no threat that he could flunk his exams?

Mike always had some other life out there. He had a school life where he obviously was part of a scene and a nucleus of a lot of people and then he had another life somehwre else......

--- I'm not sure how to understand these two "scene" and a "nucleus"?
looking forward to flunking I don't know. It could mean he has plenty of tutoring available and therefore would be able to pass the exams.
Or it could mean that since he was accepted by these smart people, who possibly respect him and take him as he is; the status of passing the exams is no longer important to him. So he doesn't look forward to the exams with trepidation, pass or fail. (Not sure about this.)

part of a scene He's a "member" of a group where things are happening. He's a participant in the group's activities.

a nucleus of a lot of people It's a cellular or molecular analogy. The nucleus is the center or the core. In a large group, or organization, you have a smaller group which has the knowledge and ability to make the group work, even though the peripheral members may come and go.

"A lot of people" seems strange, but it may be used to stress the strength of the group who played a vital or central role in this particular aspect of his life.
Thanks it's a bit clearer now Emotion: smile