The setting of the poem is the occasion mentioned in the title, looking into the translation of Homer. We know from his biography that Keats wrote this poem immediately after this experience, late that night. That's also what we feel in the poem, though: an immediate reaction to a specific experience.
The settings in the poem, on the other hand, are all over the place. We are led broadly to realms, kingdoms, states, western islands, wide expanses—lots and lots of land. The second section of the poem narrows down a little bit as we see a new planet through the little window of a telescope, but then we are taken right back to a huge and incomprehensible setting: the view of the Pacific Ocean from the top of a mountain.
All these settings are used to reflect the kind of interior travel that is only made possible by great art. Travel is an important metaphor to this poem, with an emphasis on the way our speaker is transported from his setting to a whole host of other exotic, wondrous locales. Our speaker is able to go anywhere he wants, no passport required, and it's all thanks to Chapman's book.