The biggest problem that Leo faces is himself. He is in an epic internal struggle over what is important to him. As Señor Saguaro tells him, the question he must answer is whose affection is more important to him, Stargirl's or the others'. But Leo really doesn't want to choose. He wants both, and thinks he can have both by making Stargirl change. He just doesn't seem to get the irony that if she changes, he will not have her. She will be someone different, right? So, in essence, once he tells her that things have to change, he has really made his choice. He decides that they are more important than her.
From the get-go, Hillari has it out for Stargirl. We don't ever really understand why. We do know that Hillari is an overall jerk who threatens to kill Stargirl's pet rat, spreads rumors about her, attacks her verbally on "Hot Seat," delights when she is being shunned, and attacks her physically when her popularity is restored at the ball. Seriously, folks, this is one Big Bad Bully.
The entire student body can be summed up as "Them." They're like a smaller version of society as a whole. Stargirl and Leo are forced to be on the fringes of society because of Stargirl's inability to conform to Mica High's social expectations. She is too different for them to accept, and since Leo has accepted her, he is outcast too. This creates a major problem for Leo. Because it is a major problem for Leo, it becomes a major problem for Stargirl. In a real irony, it is when she stops trying to be popular and reclaims herself that the society accepts her again, just before she leaves altogether. But Hillari, the "Them-est" of all the "Thems" ruins that, for good.