It isn't necessary to have every detail of a book committed to memory. In fact, it is nearly impossible to memorize or even fully grasp a book, especially a novel, in the first read. Good books are layered so that when they are read again and again, new facets and insights are discovered.
A teacher/professor will often have certain criteria that must be met. This, of course, varies greatly and can include paper length, topics, themes etc. Sometimes, you will just be asked to identify a theme, with no other framework and sometimes you will be asked to pick from a list of topics and write about them in depth. Either way, it is important to choose one that strikes you as interesting during your reading.
The audience is whoever is reading your paper and should be kept in mind at all times. More often then not, the audience will simply be the teacher, in which case you should write the paper under the premise that the teacher already knows the subject matter. If this is the case, the book report doesn't have to explain the generalities of the settings, plots, and characters. The report can dive directly into the issues.
Occasionally, you may have to write a report assuming the reader or audience knows nothing about the subject. In this instance, you must write a background section in your paper that goes over the broad strokes of what the book is about. This type of book report is more general.
The first paragraph in your book report should contain your thesis, which is the argument your paper is making. The first paragraph and thesis should form a map of the rest of your paper. A well written thesis will make the rest of your writing much easier and will also keep your paper tight and to the point. If there is a single sentence in the first paragraph that sums up what argument you are going to make in the report, this is called the thesis statement. A good thesis statement will state with confidence what you believe the author of the book/novel was trying to convey. The material for your book report will never be on something that is directly stated in the novel, therefore the thesis will have to be persuasive. It is important to give both your beliefs about the themes and subject matter and a general framework of the evidence.
The body is where you present your evidence and consists of several paragraphs. Remember to follow the outline of your thesis in order to keep things in order. Each paragraph in the body should be its own point or piece of evidence. Some of the best pieces of evidence are quotes from the book. Quotes can either be direct--- something out of the book verbatim---or paraphrased.
Other pieces of evidence can be implied, or "read between the lines" and therefore will need to be explained and argued in more detail.
The conclusion is the last paragraph of your paper. It is the recap of the whole report and is your last chance to drive your points home. Also, include a reference to your thesis in order to prove that you have accomplished everything you intended to in your paper. If there are loose ends in your conclusion or it doesn't fit with your thesis, your paper needs more work.
Never say "in conclusion" in your conclusion paragraph.
Never say "I feel that...", "I believe...," or "In my opinion." Obviously if you wrote something in your paper, you believe it.
Avoid adverbs. They carry little meaning and do not move your paper forward.
Brevity is the key to good communication. Don't write seven words when five words will do. Avoid flowery and pretentious language.