We can respond to this question about the crucial element of setting by thinking about the theme of death in this excellent short story. Let us remember that this story is permeated with examples of different deaths. There is the death of Leroy and Norma Jean's son, Randy, there is the way of life of rural Kentucky that is ending, as modernity in the form of shopping malls and subdivisions overwhelms it, and then there is of course the actual relationship of Leroy and Norma Jean which occurs, significantly, at the sight of Shiloh, the Union cemetery. Note how several of these "deaths" are actually welded together after Norma Jean ends their relationship in the mind of Leroy:
The cemetery, a green slope dotted with white markers, looks like a subdivision sight. Leroy is trying to comprehend that his marriage is breaking up, but for some reason he is wondering about white slabs in a graveyard... He tries to focus on the fact that thirty-five hundred soldiers died on the grounds around him.
The author therefore uses setting very crucially to establish a dominant theme of the novel as we are presented with a series of different things that die in one way or another: old selves, identities and roles, traditional culture, the American Dream, and most importantly, the death of the marriage of Leroy and Norma Jean.