Imagine a story where you could take the exact same characters, move them to another city, and the story would be exactly the same. If that’s how your screenplay would work, then you need to give your setting more of a personality.
A story’s setting should be unique to that story in such a way that moving the story to another city would not work. Think of the bleak cold in “Fargo” and now imagine if that exact same story took place in the summer in Miami.
The story might still work, but part of the charm of “Fargo” comes from the unique setting of that part of the world where people talk with a unique accent and are forced to deal with the harsh winter.
Take the empty isolation of space in “Alien” and imagine telling that same story in a crowded city like New York. It would be an entirely different story because the setting creates different opportunities for the hero and villain alike.
When you’re writing a screenplay or even just a scene, ask yourself how are you taking advantage of the setting? If the setting is a generic house or restaurant, then ask why?
In “Pulp Fiction,” the final scene takes place in a generic coffee shop, which is fine because the robbers decide to rob the place on the spur of the moment. Move that scene to a five-star restaurant and it doesn’t make as much sense for all the characters to be there.
Your setting is a character. Just as you wouldn’t name your hero WOMAN #2, so your setting shouldn’t be generic but unique to your particular story. When your setting enhances your scene, then your scene will come alive and feel more real. Create that emotion in every scene and you’ll wind up creating a great story in the end.