On Setting
When, Where, and Verisimilitude
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Setting can be an interesting thing.
For many stories, the when and where can be as simple as "here and now" or "once upon a time in a fairy tale" and that covers it. You can go into a little more detail about the exact details of the setting (is there an enchanted forest or a little farm town of quaint fields?), but you can summarize your setting in half a sentence and be done.
But for other stories, the setting can be hugely impactful and very detailed. You can set it in a real time and place, or make up the whole world that the story takes place in. This is more or less tied to the genre of your story, in that some some genres require more detailed answers about the setting than others, but not entirely so. You can have a science fiction story that is simply set "on a cold planet" without going into any more detail, or you can have a "here and now" story where the "here" is a town where every street has a name and you know exactly how many stop signs there are and the colour of the mailbox in front of each character's house.
Since it can vary so wildly from story to story, the best advice for how much work you should do on the setting while you write your story is to have as little or as much setting as your story requires.
A story can be great with almost no setting details if one of the other things (plot or character, typically) is the main focus, although it is generally a good idea to have at least a few named details in even the most sparsely described story, to at least imply that there is more to the world just outside the scope of the story. In fiction writing, this is called "verisimilitude", which means "the appearance of being true or real".
On the other hand, unless you are writing a travel blog, it is possible to have too much setting, too. You can have a very detailed world, lavishly described, but if the characters aren't interesting or doing interesting things, it's going to be hard to get excited about reading or writing that story.
So, the correct amount of setting is "enough", which covers a huge range of possible amounts, but you should be able to feel if you've added too little or too much when you read your story.