There are three correct answers here:
1. The time of day during which the story takes place
2. The city in which the story takes place
3. The atmosphere or mood of the place.
Characters exist in the setting but aren't part of it in the same way we live on Earth but aren't part of the Earth's composition.
Short answer: The pronoun "that" precedes details about the noun that are essential, while the pronoun "which" precedes those that are non-essential or can be eliminated without changing the meaning of the sentence.
Explanation:
In grammar, the function of "which" and "that" is to precede or introduce clauses, especially those that provide information about the noun. Additionally, these two words differ slightly on their function because they introduce specific types of clauses.
Indeed, the use of "that" shows the information introduced is essential or cannot be eliminated as in the sentence "My sister that is living in Europe get married" because the detail "is living in Europe" is essential to define "My sister". This does not occur with "which" because this precedes information that can be eliminated or it is not essential as in "My car, which is brand-new, just broke down" because in this sentence the key information is that the car broke down.
A. contributes
to the conflict and adds to the characterization
Fact bc it isnt a picture and the information is pure fact