In Joyce's "Araby," the first setting is described in terms of figurative blindness and paralysis (the street is a dead end, etc.) This reflects the young narrator's emotional and mental and spiritual states. He is blinded by illusion concerning Mangan's sister, his relationship with her, and the connection between the religious and the secular. He sees himself as a religious hero, the girl as the embodiment of the Virgin Mary, and their relationship as something holy. He is unable to separate the religious and the secular. He is figuratively blind.
The setting of the bazaar, Araby, later turns out not to be what he assumes it will be. Instead of being unique and exotic, it is just a mediocre traveling exhibit that sells trinkets, sponsored by the church to make money for the church.
This setting actually propels the narrator toward his epiphany or awakening, during which he realizes that just as Araby is an illusion, so is his idealized vision of the girl as the Virgin Mary, his view of himself as a religious hero, and his view of their relationship as something special.
In short, the dark, closed facility of the bazaar, the trivial, senseless flirting he overhears, the rudeness of the worker, and the items for sale lead the speaker to his epiphany. Again, as Araby is not what he thought it was, neither is Mangan's sister, etc.
In the closing lines of the story, the boy sees himself in a new way, and his eyes burn--his blindness is lifted.
Setting and story are closely integrated in "Araby." The alleyway, the busy commercial street, the open door of Mangan’s house, the room in back where the priest died, the way to school—all are parts of the locations which shape the life and consciousness of the narrator. Before the narrator goes to Araby, it is his thoughts about this exotic, mysterious location that crystallize for him his adoration of Mangan’s sister, who is somehow locked into his "Eastern enchantment" (paragraph 12) of devotion and unfulfilled love. At the end the lights are out, the place is closing down for the night, and the narrator recognizes Araby as a symbol of his own lack of reality and unreachable hopes. Seemingly, all his aims are dashed by his adolescent lack of power and by the drunken and passive-aggressive uncle.
The boy’s biblical and holy descriptions of the setting and Magan’s sister enhance his sacred adoration toward her which ultimately leads him through maturation from a boy to a man. To the boy, the girl is saintly and angelic; she is always surrounded by “light”, as if by a halo. She becomes an object of faith to the boy and when she finally talks to him the light “[catches] the white curve of her neck, [lights] her hair… [and] the hand”. When she tells him how she wishes to go to the Araby, he promises he will “bring something back”. He imagines himself as a knight in search of the Holy Grail and his trip to the Araby is to him a holy crusade. The bazaar is filled with “darkness” and “silence” which he describes as an enchanted “church after a service”. Yet, as the Holy Grail was never found, the boy realizes at the bazaar that his love is not to be found. Through such realization, the boy takes his first step to adulthood.