Most of the initial situation has to do with setting up the scene and mood for the story that is about to unfold. Hawthorne does this primarily with the setting – the lengthy third paragraph, in which we see the paraphernalia of Heidegger's study – makes up the bulk of this set-up.
The story's arc starts with Heidegger's claim that he has in his possession water from the fountain of youth. His offer to share this elixir with his guests constitutes the central conflict.
Heidegger's warning in paragraph nineteen should signal to the readers that this story is about more than a magic potion FedEX'ed in from Florida. There are psychological and moral issues at hand, and we get the sense that Heidegger is experimenting with more than bubbly water (see "What's Up with the Title?"). Additionally, the narrator's hints that the potion's effects may just be an allusion add yet another complication to the story; we're not sure if the guests are actually getting younger or not.
You can really feel the story building toward its climax as Heidegger's guests drink more and more of the elixir. Their voices grow louder, their behavior more frenetic, their actions more frantic as they quarrel, fight, and romp about the study. The moment when the vase shatters is the clear pinnacle of this stage of the story.
When we see that the potion's effects on both the butterfly and the rose are only temporary, we naturally turn to the guests to see if the same thing will happen to them. Granted, this is pretty low on the suspense scale – this stage plays a minor role in the plotline of Hawthorne's story.
The excitement is over as the effects of the elixir wear off. Since the vase has been shattered and the water spilled across the floor, this denouement carries additional weight and finality – there's no chance of going back to the frenzied joy of youth.
The story's conclusion is pretty much summed up in Dr. Heidegger's own assertion: "If the fountain gushed at my very doorstep, I would not stoop to bathe my lips in it" (51). The conclusion is a moralistic one, which we discuss in detail in "What's Up with the Ending?"