I think you should start by describing the relationship between Dorian, his picture and society: § 1: The picture has “lent” Dorian its appearance so that society sees Dorian as perfect.

Notice that the world is under the tyranny of appearances (people believe Dorian is “unspotted” because he looks good). This tyranny is of course an accepted slavery: people refuse to question appearances.

Why do they do so? Perhaps because they live on ideal images (think of Basil): people “saw, or fancied that they saw, in Dorian Gray the true realization of a type” (§ 4). “They wondered how one so charming and graceful as he was could have escaped the stain of an age that was at once sordid and sensual.” Dorian seems to represent the only thing that they can still believe in a corrupt world. (Of course, as in many other extracts, you should not miss the irony).

This idolization of Dorian has a definite homosexual streak: “Indeed, there were many, especially among the very young men, who saw, or fancied that they saw, in Dorian Gray the true realization of a type of which they had often dreamed in Eton or Oxford days, a type that was to combine something of the real culture of the scholar with all the grace and distinction and perfect manner of a citizen of the world.” (§ 4) Remember that for people like Wilde or, a bit later, E. M. Forster, the public school (Eton) and university (Oxford and Cambridge) system, despite its social conservatism, offered a sort of utopian haven, both cultural/intellectual and personal/sexual.

However, it is not homosexual in the sense of being restricted to a particular/separate group of people (an “underground” group, what is more): “an age that was at once sordid and sensual” is enough to show that it concerns the values and identity of a whole society.

§ 2 and 3: This idolization of Dorian is ambivalent: “mysterious and prolonged absences” “gave rise to such strange conjecture.”  As well as being an icon of purity, Dorian is also the object of people’s fantasies about crime and corruption, and others’ behaviours towards him is somehow akin to that towards a pariah: (§ 1) “Men who talked grossly became silent when Dorian Gray entered the room.”

You should concern yourselves with Dorian’s for the moment euphoric relationship to this state of affairs. See how he delights in taking advantage of his good social image and at once beholding the degradation of his “private” image (his picture) as a purely aesthetic motif.

(This could – either consciously or not – be a metaphor for Wilde’s homosexuality, at a time when he was forced to split himself between a social persona and a private personality that he may have found guilty and even monstrous.)

The theme of monstrosity is echoed in § 4: the phrase Dorian’s “little dinners” is reminiscent of the “petits soupers” of the French Regent during Louis XV’s minority, the libertine Philippe, duc d’Orléans, a euphemism for his bouts of debauchery (orgies).

Note the role of Lord Henry, Dorian’s instructor in mundanity, aestheticism and immorality.