Show, don't tell. This advice is pretty much the most used and possibly most important you will get in fiction writing. I'm sure you've heard it before, and I'm sure you'll hear it again. Don't disregard it, even if it might be cliché. While your ideas could be pretty good if you pull them off in your writing, your story is boring as hell so far for the reader.
"The stench of rotting whale corpses was unavoidable throughout the entire town of Gloucester, Massachusetts and several miles west, wherever the Atlantic wind finally came to push it."
It seems like you were trying to catch the reader's attention by starting with the stench of rotting whale corpses. You want to catch their attention, but you don't want to look like you're trying to. It is too blatant as is, and comes off as an attempt to include cheap shock value. I would try to be more discreet about stating "rotting whale corpses." I might have the opening paragraph follow the path of the stench from the whalery (or wherever it is the whales are being processed) through the town, adding descriptors about the setting.
"With the cloudy morning fog came the extraordinary production and mass slaughter of the largest animals known to man; the town was infamous for existing as port to the largest and most successful whaling fleets in the young American nation."
This seems kind of clumsy. I would describe the first part instead of saying it outright like you did. Keep the second part as is, but use renowned or famous or something instead of infamous. Infamous implies that people think the whaling industry is bad, and I thought you wanted to show that their carelessness eventually would lead to the whale population's depletion. I think the word "American" is unnecessary too.
"To the men of the town, young and old, their duty was worthy of nothing less than the highest honor. The harvest of whales was more a culture to the men of Gloucester than it was anything else. Like so many others, it was a career that had been passed down from each father to son, year after year, generation after generation, and yet monotony was not the slightest bit evident to the people."
Show, don't tell. This is some good stuff, but it's wasted unless you show it with the characters through their actions, dialogue, or whatever.
"These glorious whalers were the effect of what had been reinforced inside their minds during the time they had spent on this Earth."
Wordy. The complexity of the sentence doesn't add anything.
"They were the victims of a lie much larger than the animals they were killing."
"They had less reason to oppose the hunt than they did to side with it and thus, quite logically, no individual objected to the bloody, gruesome hunt."
Instead of this, a conflict should arise in which someone (main character probably) expresses some sort of doubt about the morality of the entire industry, but realizes that the town could not run without it. That could be good main contributing factor to his going crazy.
"In Gloucester, whaling seemed less like work [better if: "than a due..."] and more similar to a due that [don't need "that"] the men were required to pay to the world [I would cut out "to the world"]. They had been told by their fathers to give their support in the form of catching and preparing their natural resources for the sustainment of outside populations."
The second sentence just sounds weird. I would cut it out and make this conflict appear between the character's father and him, or something like that.
"They were to survive, no matter [use "even" instead of "no matter"] if it meant the death of the surrounding life."
You seem to be using a lot of "they"s.
"The people of Gloucester were consumed by the expanding world around them."
"No individual would ever come to question or discuss this bizarre and powerful force, which gave purpose to their career."
I thought this is exactly what your character does.
"It shifted each man’s ideology, hollowed his soul, and taxed his short life. The entire town was prey to a well-organized system that fit together in a generational cycle."
I like the way you said this too, but it would still be better if it was fleshed out throughout the story.
"They were all unknowingly condemned to a lifetime of conformity."
Sorry, but please don't do this. It makes you sound exactly like an angsty teen, which people hate to read. I know the idea of the story is about conformity and "the system" and all that, but you can still pull it off without being pointed out as a raging teen. Plenty of great works deal with this theme, but people can always tell the difference between shallow teenage angst writing and mature observations about the world. It has to do with letting the reader figure the theme out for themselves instead of outright telling them.
I'm really sorry if I came across as a jerk (and a broken record, but the show, don't tell rule is important). I know I probably sounded harsh, but harsh criticism is sometimes the best. Remember: you don't have to use any of my suggestions, they're just possibilities and it could be totally wrong with what you want to do. Everything is ultimately your choice, but always at least consider any feedback you get, because the reader has a different vantage on the story, which is extremely valuable. For the SAT situation: it's good that you don't seem daunted too much by it. I'm glad that you decided to keep going with your writing, but keep in mind that you didn't get a 4 because you were creative, you got it because you were either not paying attention to form, structure, and grammar (or because you didn't answer the question adequately) or because you aren't as good as you could be in those areas. To be a writer, creativity is by far the most important facet (and it seems like you have it), but the basics are essential as well. Don't forget about them. The most important thing is to keep writing. Don't be discouraged by criticism, but learn from it.
You can't fight in here! This is the war room!