These are great answers, Misha. Your point about the setting provided challenges in the Appalachian story is exactly the kind of thing I was thinking about. The contribution of setting to plot is more obvious when the story is character v nature but even in stories where it’s not, it’s very satisfying to see how setting drives character and plot. I remember reading Midnight in the Garden of Good and Evil years ago and thinking the only place that story could happen was Savannah. Transport it to New York or Omaha, and it’s not the same story at all.
And I agree about the amount and kind of detail in setting being important; we don’t need every detail at first but we need enough to understand the context. And we need something other than visual images (I think this is one way narrative has been badly influenced by movies/television; writers tend to think primarily about what they “see” as they imagine their stories).
The point about being “in” the character’s perspective versus just writing “about” the character is excellent. That latter is what an omniscient narrator does.