Setting Mood Analysis

In the following excerpt from a fictional novel, the author describes a small rural town during the late afternoon:

"The sun dipped low in the sky, casting long shadows across the dirt road. Children laughed and played in front of the weathered white fence of the old Thompson house, while the scent of freshly baked bread wafted from the nearby bakery. The distant sound of a train whistle echoed softly, punctuated by the chirping of crickets as twilight approached."

Based on this passage, what role does the setting play in the overall mood of the piece?