It could be that the sweatshirt has some special significance. Say it was a gift from a very important person or it represents a memorable event. So when it comes to that particular sweatshirt, there's no more to be said, it's just 'end of story'.
It might mean that the sweatshirt is the final or most important thing in a situation. For instance, in a clothing collection, if someone says this, it could imply that the sweatshirt is the standout piece and no other item is worth mentioning.
I'm not sure specifically what the 'Animal House Sweatshirt Story' is about without more context. It could be a story related to an animal house, perhaps a fraternity or a place full of animals, and the sweatshirt might play a significant role in that story, like it being a special item or a source of some kind of adventure or memory.
The red hooded girl is often associated with the story of Little Red Riding Hood. In this classic tale, a young girl in a red hooded cape is sent to visit her sick grandmother. Along the way, she encounters a cunning wolf. The wolf tricks her, gets to the grandmother's house first, and pretends to be the grandmother. When the girl arrives, she notices some strange things about 'grandmother' but eventually realizes it's the wolf. There are different versions of how she escapes, but it's a well - known story about naivete and danger in the woods.
It could be that she secretly likes the smell of it, which is a bit of a personal and intimate reason. In the context of the fanfic, it might also be a symbol of their relationship, and by stealing it, she's making a statement about how she feels towards him, whether she realizes it fully or not.