The sentence that best highlights the story's setting in this excerpt is:
She busied herself with following the aerial creations of the poets; and in the majestic and wondrous scenes which surrounded our Swiss home —the sublime shapes of the mountains, the changes of the seasons, tempest and calm, the silence of winter, and the life and turbulence of our Alpine summers—she found ample scope for admiration and delight.
There are other mentions of the setting within this excerpt, but this sentence gives the reader a vision of what their "Swiss home" in the mountians must look and be like. Shelley talks about the shapes of the mountains and the changes in seasons to give the reader the image of the home in both the winter and the summer. The woman in the story admires the view and Shelley wants the reader to as well.