I have a database that consists of over 150,000 stars. The game will hopefully consist of a free to explore universe creating the illusion that the user is flying amongst a realistic representation of the stars.

Representing the star data itself is among the least of the difficulties.

While the scales you are talking are fun to think about, in practice they tend not to work well in games.

The idea is fun in theory, and a few games have explored the theme. But there are very good reasons the games do not use realistic representation of planets and stars and interstellar distances.

There are many major obstacles.

Consider the engines and graphics systems are using floating point numbers. They have about six decimal digits of precision, so you can count to about a million stepping by single-digit values. After you get to around 4 million or 8 million or so, you can no longer increment by one. Adding 1 more leaves the number unchanged, it is too small for that scale of floating point.

Usually games work with a meter scale, with a useful region around one km in size. The largest local area is a few city blocks, the smallest distance is about the width of your fingernail. That means a scale of around 1000 to 0.001 meters. Anything outside that tolerance throws off the six decimal digit precision.

The distance from Earth to the Sun is about 150 billion meters. If you attempt to mix the scale of meter-sized objects and space ships with the scale of interplanetary distances, floating point precision means the smallest increment between two objects is a kilometer distance. Anything smaller than a kilometer is too small to exist at that scale.

The distance from our sun to Proxima Centauri, our probably-nearest star, is about 4 light years or 4*10^16. Represented as a float with six decimal digit precision, even the entire star is too tiny to exist at that scale. If you can represent an interstellar distance in a float you cannot also represent the size of a ship, a planet, or even an entire star; the distance is so huge it overwhelms the scale.

There are solutions to the problems of scale, but they take either a bunch of difficult math or some complex systems of relative scales and relative distances. They are a bad for for a first project, a second project, or any project before several years of experience.

The scale of objects tends to break down terribly, planets are only a tiny spec unless you are very close to them. Traveling from one planet to another planet at speeds we know we can reach means travel times of months. Traveling the distance at light speed means times ranging from minutes to hours.

If you're looking at realistic interstellar distances, they are so much farther. Again, our nearest star is 4 light years, our galaxy is over 100,000 light years across. If you have light-speed travel in your game, then waiting around to reach your destination means many years, possibly many lifetimes, before reaching the destination. You can include faster than light travel in your game to shorten that to game-friendly times of a few seconds or maybe even a full minute, but you're mixing realistic distances with travel measured at light-years per second, you lose any credible claims of having realistic star distances.

Most space games do this by faking everything and not pretending they are realistic. You have a tiny group of asteroids or satellites but they are not a realistic scale. Something is drawn nearby on the skybox picture that looks like a planet, something else is drawn on the skybox picture that looks like a star or two. Physics and motion are all faked to values that feel good to play. Travel is through sci-fi jump gates or warp speeds or hyperspace or some other fiction so you can jump directly to the action.

The project you describe is ambitious even for an experienced team of professionals who are comfortable finding good alternatives to these problems. For a first game this is bad selection. Think much smaller in scale for now.

I have recently started to plan a project in Unity that will be for android. I have a database that consists of over 150,000 stars (may trim this down if I/O cripples the overhead). The game will hopefully consist of a free to explore universe creating the illusion that the user is flying amongst a realistic representation of the stars.

My biggest concern at the moment is how do I create a realistic environment, while keeping the (phones) resources to a minimum? Some people mentioned using octrees, would this be wise?

Yeah it may help.

What are some common errors many people run into with such development?

I'd say overdoing stuff.

For performance you need clear goals, Take your minimum required hardware and test on it.

Set up your goal before testing for performance.

How do I manage the stars looking realistic and the background looking realistic at variant distances while once again keeping resources minimum?

Games are illusion to what happens. The best thing is to create something that looks good, however it does not need to be accurate.

How do game objects different from what is in immediate view to far view?

Looking for afar usually makes the objects less detailed, which mean you can either ignore them, or draw minimal objects. (Just a sphere with no texture, or even a point if it's really far)

What type of navigation mechanics work best for such a setup?

Depends on game design. I'm not sure what is your question here.

This is my first game that I am looking to create so any help would be much appreciated to this novice! Thanks in advanced!

Learn the technology as much as you can before you actually implement stuff. Play around and see what really looks good.

You have really general question. This is due to lack of knowledge.

My advise, just grab some tutorials, and dig in unity to learn how to implement what you want.