"Courage!" he said, and pointed toward the land, "This mounting wave will roll us shoreward soon."
This first line dumps us right into the middle of things. We don't get any preparation here—Tennyson doesn't set the scene or introduce the characters. Someone is just suddenly talking, and telling someone else to have "Courage!"
More specifically, the speaker lets us know that this guy is pointing at the land. Then the speaker promises that the wave that's rising ("mounting") is going to push them toward the shore soon. So we can guess that this speaker, and the person (people?) he's talking to are on or in the water (maybe swimming, maybe in a boat) and that they hope to get to the land… somehow.
Starting right in the middle of things is what's known in the biz as in medias res, and it makes for an exciting opening (sort of like the first scene of Saving Private Ryan, for example). All of a sudden we're just thrown into the action.
One other note here: check out all the S sounds going on in "us shoreward soon." That's some consonance for you, and we're going to bet that there's a ton more where that came from. (Check out "Sound Check" for a run-down.)
In the afternoon they came unto a land In which it seemed always afternoon.
Now the first talker goes away, and the poem's narrating speaker takes over full time. We zoom out a little bit, and the action-packed mood of the first two lines relaxes a little.
The speaker tells us that the guys we heard about in the first lines have arrived in a place where it always feels like afternoon.
That sets up a pretty chilled-out vibe. We can imagine ourselves on a beach, maybe drinking something out of a coconut…
At the same time, we think there's something a little weird about these lines, too. It's pretty subtle, but the repetition of "afternoon" threw us off a little bit. It contributes to the dream-like feeling, but also makes us feel like we're stuck in a little bit of a loop. Eternal afternoon is a relaxing idea, but maybe a little unsettling, too. Let's read on…
All round the coast the languid air did swoon,
The speaker keeps playing up the relaxed feeling of the setting. The lazy ("languid") air around the shore of this place doesn't even blow around—all it does is "swoon" (that means to faint, to collapse, to fall asleep). In other words, this place is so relaxed that even the breeze is falling asleep, just like a person would. (When a poet imagines a thing like air doing something a human would usually do, we call that personification.)
Breathing like one that hath a weary dream.
Now the speaker extends his comparison between the air and a sleeping person by using a simile. He says the air is "[b]reathing like" (that "like" is the key to the simile) a person having a tiring dream. The speaker is working really hard to emphasize the images of tiredness, relaxation, and sleep. Even the dreams are "weary"—yawn.
Full-faced above the valley stood the moon;
In this line we get a little bit more info about the setting. Apparently these guys have wound up in a valley, with a full moon above them. The image of the moon being "full-faced" is another subtle personification that makes us think of the man in the moon.
And like a downward smoke, the slender stream Along the cliff to fall and pause and fall did seem.
Now the speaker describes the little waterfall that is running down the side of the valley. In this place, apparently even waterfalls take their sweet time. The water doesn't even fall straight down. It almost seems to stop while it's ambling down the side of the cliff.
To drive that point home, the speaker uses a simile to compare the water to smoke drifting "downward." This image of a lazy, smoky spray of water is just one more way of letting us know this place is sleepy, slow, and relaxing. Naptime, anyone?