Why not? Just take this as an example:
Cutscene in between race rounds in the pits.
Peppy: Fox get your head outta your ass and into the race!!
Fox: I can't. .
Peppy: why not? We getting killed out their!
Fox: Because Krystal lost the baby!!!!
This would make me fall out of my seat
and into a standing ovation.
It could affect the music and dialogue in he following race, where everything reflects that revelation. It could have a somber acoustic guitar cover of the Corneria theme during the race
Peppy: ... uh ... Fox?
Fox: What!?
Peppy: You should ... do a barrel roll.
Fox: ... what's it even matter any more?
Then have scenes of Krystal and Fox along the beach or having a picnic together flash across the screen as you try to race, bridging the character's trauma with that's of the player's