There's no doubt about it: our girl's in a hospital room. She refers to the classic white sheets, the nurses in white caps, doctors, surgery… you get the picture. It appears to be daytime, because the sunlight shines through the window and reflects off the white interior of the room.
But that's just where the poem is literally happening. There's also a kind of interior setting – the speaker's mind, where things are a little – we'll just come right out and say it – weird. Emotionally, she seems caught between a rock and a hard place, and that's a setting in and of itself. She's quite literally stuck in the hospital bed, all swaddled up in the sheets. But she's also stuck in a more metaphorical sense; she wants to be empty and free, but her family's smiles and those relentless tulips keep yanking her back to the unpleasant present.
One last thing: where's her family in all this? Usually in a hospital room, there's someone sitting next to the bed (not just a picture frame). Do you think the speaker asked them to leave or did they not show up to begin with? How does the lack of family (or friends) change how we read the poem?