Heller mentions in the epigraph that Pianosa is too small to accommodate all the action of Catch-22, but us readers realize that Heller could've picked to set the story on an island as big or small as he wanted. The fact that Pianosa is too small to house all the action in the novel is one way of introducing the self-defeating logic of Catch-22 and highlighting the tongue-in-cheek humor of the book.
But we're not done yet. The characters spend a chunk of time up in the air, since they're pilots during WWII. The air in Catch-22, where all the bombing takes place, becomes a space for absurdity, twisted logic, and tragedy – even more so than the land of Pianosa because the air is a breeding ground for death (just consider the episodes of the Bologna, Avignon raids and McWatt's spiral to suicide).
As if that were not enough, the sea seems to signify the inevitability of death. This association, however, becomes complicated when we learn of Orr's survival. Then the sea seems like escape. So possibly both. Or possibly death is an escape. This starts to make sense when you look at Doc Daneeka's "death." As it turns out, in Catch-22, there are many kinds of deaths – the death you die when you lose your morality, the social death of isolation, the military death of leaving the war altogether. The setting (and more specifically, the sea) comments on this theme.