The setting of a story plays a colossal part in making the story believable or unbelievable. The time and place helps to establish this. The setting and its explanation actually puts the reader into the story. A good narration of a setting would allow the reader to become part of the story.
I'll show you. Once upon a time there was a little girl on her way to her grandma's house. she suddenly came across a wolf. OR Once upon a time there was a little girl on her way through the dark, scary woods to her grandma's. She suddenly came across the wolf.
See? Without the setting, you wonder why a wolf comes out of nowhere. It adds suspense.
without a setting you can not really establish a plot. most of the time, the setting is just as much a character as everything else. you need setting to give the characters substance and a home. with out setting there is no story.