Harry, Ron, Hermione, and Neville share a carriage up to the Hogwarts entrance. They race through the pouring rain but as soon as they make it into the entrance hall, Peeves starts pelting students with water bombs. Nearly Headless Nick warmly greets the students at the Gryffindor table and Colin Creevy, who idolizes Harry, excitedly shares that his brother Dennis is starting this year. Harry notices that there are a number of empty seats at the staff table as McGonagall leads a line of soaked first-years into the hall. One tiny boy whom Harry ascertains is Dennis is wearing Hagrid's moleskin coat.
While relatively low-stakes in the grand scheme of the novel, the things that Harry is able to deduce during the pre-feast time (that they're missing teachers, which first-year is Dennis) reinforces for the reader that Harry already has a firm grounding in being able to think critically about what he sees and come to conclusions using the evidence in front of him.
McGonagall sets the Sorting Hat on a stool and it sings a song about the school's founding and the qualities of the different Houses. Then, McGonagall calls the names of the students and the hat sorts them each into one of the four school Houses. After Dennis is sorted into Gryffindor, he excitedly tells Colin that he fell in the lake. As Ron, Harry, and Hermione fill their plates with food, Nearly Headless Nick explains that they're lucky there's a feast at all: Peeves created mayhem in the kitchens earlier and terrified the house-elves. Hermione is shocked to hear this and when she learns that the elves don't get pay, sick leave, or pensions, she refuses to eat.
This is the last year that the Sorting Hat sings a song that is purely informational; in future books, it sings songs of warning. This mirrors Harry's coming of age over the course of the series as, going forward, Harry will be older, more mature, and thinking more critically about what he sees around him. Hermione's refusal to eat shows her experimenting with different forms of protest. It's also important to keep in mind that she seems to assume that the elves are treated poorly like Winky was; she doesn't consider whether the elves might be happy.
After the feast, Dumbledore stands and addresses the students. He says that the Quidditch Cup won't take place this year but before he can announce what will take its place, the doors open and a grizzled man with one wooden leg starts walking toward Dumbledore. He has one normal eye and one that's large, blue, and can swivel in every direction. The man shakes Dumbledore's hand and takes a seat at the staff table. Dumbledore introduces him as the new Defense Against the Dark Arts teacher, Professor Moody.
Moody's terrifying appearance shows the students what the cost is of fighting Dark wizards, as it's implied that most of his scars and his missing leg are souvenirs of a life tracking down evil. This suggests that while it's difficult to do the right thing and fight for good, some people, like Moody, believe it's worth sacrificing their health for the wellbeing of society.
Dumbledore resumes his speech and says that this year, Hogwarts will host the Triwizard Tournament. He explains that the Tournament was established 700 years ago as a competition between the Wizarding schools Hogwarts, Beauxbatons, and Durmstrang. It hasn't happened for centuries as the death toll rose, but this time, there are safety measures in place. Nobody under the age of seventeen will be able to enter, and it will be impossible to hoodwink the "impartial judge" who will choose a champion from each school. Fred and George mutter angrily. Dumbledore says that students from Beauxbatons and Durmstrang will arrive in October and the selection will take place on Halloween.
Though the Wizarding World is relatively isolated from the Muggle world it lives inside, the "safety measures" Dumbledore mentions mirror movements in the 1990s and onward to protect children and make life safer for them. Again, this suggests that though the Wizarding world is a separate entity from its neighbors, in some ways it does follow trends set by Muggles.
On the way up to the common room, Fred and George angrily say that they're going to enter anyway, since they'll turn seventeen in April. Ron says he'd consider entering too as Neville says his grandmother would like him to, but he hasn't learned enough. In the common room, Hermione sees the fireplace and mutters "slave labor" as she heads for bed. The boys go to their dormitory and as he lies in bed, Harry imagines himself winning the Triwizard Tournament.
Harry's dreams of winning the Tournament are, at this point, just dreams. His dreams illustrate how young he still is and how fanciful this seems at this point, given that he's put no thought into the practicalities of how he'd enter. This shows that at this point, Harry is happy being a child and doesn't truly want the responsibility of competing.