Final answer:
The Arctic Circle marks the southernmost latitude for which the day length is 24 hours on the day of the summer solstice. If Earth were tilted less, the seasons would be less extreme. The Tropic of Cancer and Arctic Circle would be at different latitudes.
Step-by-step explanation:
The Arctic Circle marks the southernmost latitude for which the day length is 24 hours on the day of the summer solstice. This is located at 90° minus Earth's tilt, or 90° - 23° = 67° N of Earth's equator. If Earth were tilted a bit less, then the Arctic Circle would move farther North. In the limit at which Earth is not tilted at all (its axis is perpendicular to the ecliptic), the Tropic of Cancer would be right on Earth's equator, and the Arctic Circle would simply be the North Pole.
If Earth were tilted less, the seasons would be less extreme. The variation in day length and direct sunlight would be very small over the course of a year, and the Sun's daily path in the sky would not vary much. If Earth were tilted by 5°, the Sun's position on the day of the summer solstice would be 5° N of the celestial equator, so the Tropic of Cancer would be at the corresponding latitude on Earth of 5° N of the Equator. The Arctic Circle would be located at 90° -5° = 85° N of the equator.