sure, setting and character are the same thing
the implication is that if mood is the character of the place then those sentences that set mood are advancing character.
Some authors rarely describe a place objectively. We see a space through the eyes of the characters - and in doing so, we learn about our characters as we learn about the space they inhabit.
sure, if a character is in some narrative role; however I would argue that no author ever describes a place objectively, especially not a completely fictional place. The question really is if the unobjective description serves a coherent narrative purpose.