Setting affects your characters. For instance, a young girl in the first setting probably wears something typical of the fantasy genre - a long dress with a corset or something. If she belonged to the arctic, she probably wears a parka. In a futuristic world, she would wear something hightech - maybe a watch capable of displaying a computer on the wall?
Setting is very important, so its something you need to know. Define your setting well before you start writing.
How do you do that? First, state the premise of your book - to take from two weeks ago, a girl finds mysterious glowing egg. Obviously, magic will be involved. As we have already discovered that Mr. Fiery decided to take over the universe, this is obviously set in a place that has interplanetary connections. If Julia is disbelieved because of her overactive imagination, it may also be a place where magic doesn't happen very much.
Therefore, Julia's story is probably set in the future, or perhaps in a parallel universe, but one with magic.
That's the general setting. Of course there is also the minor settings - and unless this story takes place in a single room, there's going to be plenty of these. For instance, there's Julia's backyard. What does it look like? Does it look like any other back yard? Are there trees? Flowers? A pool? A swings-set? Where in her backyard will she find the egg. It's not vital that you know every detail about her back-yard, but give enough that your reader can visualize it.
Of course, then there's in the house itself, Julia's school, Mr. Fiery's HQ ... basically, anywhere Julia goes is a minor setting. You don't have to describe every detail of every minor setting, but give enough so that your reader doesn't get lost and so that he or she has a clear, well-defined mental image of the setting. To many details may make your reader want to put the book down. You can tell them there's a rug on the floor, but unless the pattern is important to your book, you don't have to describe the pattern. Some readers like lots of detail, but I, for one, do not, and I know for a fact that I am not the only one that doesn't.
So, describe your setting, but don't annoy your reader with it.
Of course, setting can also be used to set a mood. For instance, if you describe a place as being sunshiney and pleasant, you probably have a cheerful mood to your book. If, however, the clouds are low and foreboding, and the wind chilly and biting, you probably have a darker tone to your book.