The poem is set in a studio—a one-room apartment, where the living space, kitchen, and sleeping space are all in one room. A studio could be a nice, cozy space to live with your partner, and that's how the woman in the poem imagined it. But this one is actually dirty, messy, and in need of a lot of work. In that way, setting really drives the whole point of the poem. It's the central metaphor through which the speaker explores the woman's disillusionment with her life and her relationship.
For example: dirty dishes? Check. Grimy windows? Check. Noisy taps. Check. An infestation of creepy beetles that stare at you? Double-check! This studio is not exactly the romantic love-nest that the woman once dreamed about. In the same way, her relationship with Mr. Yawn has not panned out either. The dilapidated state of the setting really drives home just how unhappy she is with her life. We mean, when you're scared of the daylight because it shows you just how banged up your living conditions are, then it's time to reassess your life, right?