As devotees of Jane Austen's novels already know, the simple answer to Mullan's question is "everything".

There has rarely been a novelist who weighed every sentence as carefully as Austen, whose every description and line of dialogue was pregnant with meaning.

This explains why Austen's novels were so much slimmer than those of her peers. While the likes of Maria Edgeworth and Mary Brunton were explaining and sermonising, she was honing the art of subtlety, dropping clues all over the place about the deeper meaning of her stories, the motivations of her characters, and her own opinions.

This is the evergreen field Mullan, a professor of English at University College London, is tilling. You might (wrongly) think there is nothing fresh to say about Austen. Or you might (understandably) prefer simply to re-read her novels. After all, a great deal of nonsense has been written about Austen. Few writers, other than Shakespeare, have been more pored over than this mistress of love and comedy. Were she a book, her spine would have broken and her pages fallen out long ago from too much rough handling.

Unrepentantly Mullan steps into this crowded scene. His book, subtitled 'Twenty Crucial Puzzles Solved', picks up various threads that run through the works, and teases them out with an easy, entertaining style. Addressing such subjects as Do We Ever See The Lower Classes? and How Much Money Is Enough? he offers fragments from each of the novels that show the calculated, almost preternaturally sure-footed underpinning to these seemingly artless works.

His opening chapter, How Much Does Age Matter?, shows Austen's care in describing the age of her characters and the way in which this influences the way they see the world – as when, for instance, foolish 16-year-old Marianne in Sense And Sensibility says: "A woman of seven and twenty ... can never hope to feel or inspire affection again". There was nothing here, this reader felt, that was not already abundantly clear from reading the novels. But, as it's always a pleasure to be reminded of Austen's genius, it was no hardship to read further, and within another couple of chapters, one was hooked.

A book such as this is, of course, a trainspotterish delight. It is to Austen what John Dover Wilson's What Happens In Hamlet? is to the Bard. To his credit, Mullan writes without a hint of the anorak. His knowledge of Austen is extensive, but he conveys it with a breezy confidence and enthusiasm. What makes this book so valuable, however, is not just the way it illuminates Austen's literary intelligence, but its insight into Austen's times, without which a reading of her novels is less rewarding and even on occasion baffling.

So, when he explains why and when characters call each other by their surnames, or their Christian names, he is revealing the extreme formality of an age when even husbands and wives did not commonly use Christian names. When they do, as in the case of Charles and Mary Musgrove in Persuasion, this, he says, "dramatises the companionable disrespect of their relationship". In another chapter he discusses Austen's use of conversation about weather as a barometer of character, and also reminds us that in an age when few could commandeer a carriage, life was dictated by the skies.

From the nature of characters' illnesses to the significance of the few deaths she allows into her novels, Mullan opens a window on an era when life was precarious. As he observes, Austen herself would have frequently been dressed in mourning for various family members. Perhaps for that reason, death is a minor player in her work, and when it does intrude, it is generally off-stage and not tragic. In at least a couple of instances, she also "wants you to notice how deaths can suit the living".

Austen's refusal to be pious, coy or hypocritical was one of the qualities that set her writing apart. Her heroines are full of flaws. As she wrote in a letter to her niece, "Pictures of perfection as you know make me sick and wicked". For a spinster she was also decidedly unprudish. "Austen's stories," writes Mullan, "rely on an acknowledgement of men's sexual appetites." Women's too.

It is remarkable that in such a cloistered, moralistic period Austen wrote about people as they were. Their foibles and weaknesses were what fascinated her, and this eye for truth rather than cant is part of what makes her novels timeless. It is also what distinguished her from the pack. In his last and most inspiring chapter, How Experimental A Novelist Is Jane Austen?, Mullan addresses the author's radical originality: "Any novelist can tell us what a character feels; Austen developed a means of declining to tell us."

Her books are like life itself – unsettling, open to interpretation and told for the most part in the voices of her characters whose perspective skews the reader's. Thanks to her innovative techniques, one could argue that no novelist has had a greater influence on later generations of writers.

Among the obvious joys of Mullan's work is discovering hidden depths to the actions of Austen's brilliant characters. Yet he does more than simply reintroduce us to these flesh and blood creations. In revealing the nuances of social and economic life that were the bedrock of Austen's mischievous yet deadly serious novels, he makes their creator come alive again in our midst. Formidable, unflappable and in literary terms nigh infallible, she was clearly as spirited as her heroines, though probably a great deal scarier.

what matters in jane austen?

John Mullan

Bloomsbury, £14.99