
Novel reader here!! (MAJOR NOVEL SPOILERS)
Yes, you are correct on your assumption that they knew each other from their past lives. The mc, ml and some other characters died and were brought into this world, which is a novel that the mc’s sister and her friend wrote. At this point I think neither the mc or ml are aware of what happened but mc has flashbacks of the past world because of some circumstances.
The mc and ml were lovers in the past world so they did already know each other and the flashbacks of the mc with another high school student (his first love) are him and the ml. The mc and ml look the same as they did in their past lives the only reason why the ml might look a bit different is because the current version of him is older than the flashbacks of him.

Well it's something similar. I mean it's a different world but you can say that tha other world is their past life. Btw the current world is a novel what the sister's friend created with the help of the sister (in this world brother). And yes she was the one who made herself a boy and basically killed her brother in the story. I honestly hate the sister she is so selfish and made the MC think he is crazy but dhe always knew the thruth...... I and the MC couldn't forgive her for all the shit she did.
I think that mc and ml knew eachother in the "other world" and I think that they both transferred into a novel after dying in some accident.. Bc you see, in chap 6 mc has a dream with memories from his previous life and he meets a sunbae there that has the same earnings as ml, which lead me into thinking that they are the same person.
Also after mc tells ml that he has a little brother, ml mentions. that he was pretty sure mc has a younger sister, which is true but in the "other world". I think ml lost most of his memories but remembered a few things like for example, mcs face. I think that's why ml let mc drag him around when they first met and paid for mcs hospital bills.
These are just my speculations so if anyone has read the novel pls spoil me!