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I've been reading a lot of books about plot and character arcs. Most structures—and I believe this is generally good and true—require that the character come back from their journeys changed, usually for the better, by overcoming the very things that hindered them at the beginning of the story. But what if the character doesn't overcome and in fact the story continues, more like in life, w/o a happily ever after, and w/o some greater internal victory or inspiring revelation, but rather a submission or acceptance of life's disappointments?

Eg. a child of divorced parents, wants to go live with the other parent, but realizes by the end of the story that it's not possible, and instead has to continue living with the other parent, who is more abusive or unloving. A tragic example maybe, but I can think of many more realistic endings that don't have a happily ever after and don't also end with positive growth (maybe the opposite, a new wound).

How do you structure a good story like this? I'm looking for plot and character advice to make a tragic story, still interesting and even entertaining, even if it's not especially hopeful. In reality, this new wound would follow the child (into the next story maybe) as they would be too young to overcome it (but maybe they would as an adult). How to approach and structure this kind of story?

A character coming to understand that what they want is impossible and instead learning to live with what they have, is a perfectly reasonable character arc. The character overcomes something (wishing for the impossible), learns something, while their life is not perfect, it surely is somewhat better as a result - those energies invested in trying to attain the unattainable can instead be invested in improving the existing situation. Probably the character learns how the existing situation can be made tolerable.

A tragic character arc is also perfectly reasonable: it's possible that your character starts out believing in endless possibilities, and his arc is learning that sometimes life is painful, unfair, etc. The Lord of the Rings offers a mild example of this: Frodo sets out expecting a "there and back" journey - to have an adventure, and then come back and settle down in a happily ever after. As his story progresses, he comes to realise that his trials have changed him, there can be no happily ever after for him even if he "wins".

Stories do not require growth of a character; there are many series (Detective series being the most prevalent) in which the MC doesn't really change much at all, even if they do have emotional experiences. They may or may not grow during the series. Often these are adventure series or "mystery" series (the main crew has to solve some mystery).

You can recognize this most readily in TV and Movie series. I don't detect much change in Jack Sparrow of Pirates of the Caribbean, or Sherlock, or House, etc. James Bond doesn't change much. In the Ocean's XX movies, I don't see much change in the main characters; the movie is about conning somebody out of a fortune, in an entertaining way. Very few episodes of Bones, or House, or Elementary involve any MC actually changing (as distinct from having an emotional experience). For actual Novels, the Rex Stout series about private detective Nero Wolfe and Archie Goodwin will suffice, I read those when I was a kid and don't think the two main characters ever changed. But the mystery was always very challenging and well written (I thought).

I will agree with Galastel's insights, posted before this; but I don't think character change is absolutely necessary at all; some stories can be just about a clever adventure and interesting characters solving a fascinating puzzle.

It's common in comedies because much of a character's humor is the personal flaw of the character being challenged and then forgotten about next episode. For example, Bart Simpson has learned many a lesson about not being a misbehaving brat of a child or how he should appreciate his sister or mother more. Cut to the next episode and it's as if the lesson was unlearned, because while Bart having to see a different perspective is amusing, learning a lesson from means taking away the dynamic that makes the show funny. Often, Bart will be asked by another character if he's learned anything from the episode and explicitly says no, to the asker's chagrin.

Sometimes the lesson could be learned, but the individual is too stubborn to admit they changed their way of thinking. Perhaps your child is shown why the noncustodial parent isn't a proper fit for him, but doesn't want to give that up explicitly and will deny the obvious lesson. This could be pulled off by having the kid state his original premise, but have him do or say something that lets the reader know he doesn't really believe it any more.

One of my favorite examples of this is in "Transformers: Beast Wars". Dinobot defected in the first episode from the villains (Predacons) and joined the heroes (Maximals), but is still not perceived as being truly loyal by Rattrap and the two have a rivalry that ends up becoming friendly overtime. And it's clear from Rattrap's behavior around the other Maximals, Rattrap trades mocking bards with everyone, including Optimus, who is his superior and whom Rattap disobeyed exactly once only to learn that Optimus does not give orders he himself would not be willing to do. Eventually Dinobot is involved in an incident that calls his loyalty into question and nearly kills Rattrap to boot. While he is permitted back in the fold of the Maximals, Rattrap trust of Dinobot is gone. In the episode "Code of Hero", Dinobot is shown briefly to be suicidal over the affair and only gives up because he realizes his concepts of honor wouldn't convince the Maximals of his sorrow. And then he encounters an unaware Rattrap, who finally deals Dinobot a truly cutting insult:

You know, I used to figure I had you pegged. 'Oh, yeah, he's a slag-spoutin' saurian, but at least you know where he stands.' Guess we live and learn, huh?"

At the core of the pair's mutual understanding is that the two characters recognize they have a disagreement over nobility vs. loyalty. Dinobot is noble, and believes that the means justify the end. His intial defection was not about Megatron's ultimate goal but because Megatron was prone to dishonorable behavior and thus the goal was forever tainted. Rattrap believes the end's justify the means. To him, the Maximals goals are justified in and of themselves and any seemingly dishonorable action taken to further that goal are in fact honorable. Dinobot understands that Rattraps jabs at his loyalty prior to the most recent event were just tweaking his own honor. Rattrap saw Dinobot as noble because he is fighting for the right side, and is only mocking Dinobot's Heritage, because Rattap's humor is all about mocking someone's sacred cows and Dinobot is still a proud Predicon Warrior, even if Predicon Leadership is wrong. It was never about Dinobot's Code of Honor because Rattrap and Dinobot agreed on the same outcome even if their methods would be damning. And Dinobot's respect for Rattrap is that Rattrap never treated Dinobot with any less respect than any other Maximal (or Rattrap does not dispense pleasentries to anyone, but he's not singling out Dinobot for any excessive abuse over any other team member).

It also resolves Dinobot to how he can be absolved. Not by showing remorse but by gaining his lost respect back. Unfortunately, this leads Dinobot to an encounter with the Predicons where his inaction will result in Megatron achieves his Goals but swift Action puts Dinobot into a fight that will delay until back up arrives, but he cannot survive. Ultimately, Dinobot chooses to join the fight as it is the only one that will satisfy both his and Rattrap's beliefs: The Predicon's will be unable to achieve victory through ignoble methods allowing for them to be achieved with honor later, and any way that stops the Preidcons is good, regardless of the methods used. True to his assesement, Dinobot is able to stave off the Predicons long enough for the Maximals' to arrive and secure a Predicon defeat, but at the cost of his own life. He is surrounded by his allies in his final moments, all of whom offer parting words of commfort. Rattrap is the final speaker and unlike the other's stands by his previous comments at the very beginning of the episode:

"Like I said, you're just a blasted, slag-spouting saurian, but... it's nice to know where you stand."

However, it's clear by Rattrap's tone and delivery this time it's not an insult, but possibly the most clear instance of respect Rattrap has ever given to anyone. And it's repeating one of the most purely insulting things he has ever said. And again, Dinobot immediately understands what Rattrap is saying beyond the mere words and responds in kind with another insult (to which Rattrap smiles). When Dinobot finally dies, it is Rattrap who is the first to salute Dinobot, and it is the most visibly enthusiastic.

While both character's are too stubborn to admit it, they are probably the two closest friends of the series until Dinobot's actions tear there friendship apart. While there moral philosophies on their face seem incompatible (Personal Honor over Collective Goals vs. Collective Goals over Personal Honor.), they were able to look deeper than the surface. Rattrap insulted Dinobot by calling him a Predicon turncoat, something Dinobot was proud of because he would be able to retain his honor. Dinobot in turn would insult Rattrap by speaking ill of his dirty deeds, which Rattrap was proud of because they were done for the good of his allies. Such insults were insults only to the one who uttered the words, and praise to the ears of the one who heard it. They didn't need to openly state they were friends. They sang their praises of each other often enough that it was assumed.

Goal driven characters, and I'm thinking of one story in particular more than any other, can accomplish their story arc without ever facing their flaws, without growing as people, and without their accomplishments necessarily bringing them any true happiness. The case of Druss is particularly instructive because it's clear that he never would have succeeded in his goals if he had grown as a person. If Druss were a better person at the end of his quest than the day he set out he'd have walked away when he found the object of his quest instead of dragging it home.