@Eternal: Yeah, although sometimes it’s fine to just rate premise as ‘premise’ rather than comparing it against ‘setting’, seeing as setting development is simply too underrated these days to be bothered with half the time D=

Obviously there are a lot of shows that suffer from just plain laziness on the part of the writers (all of Type Moon’s and CLAMP’s shit come to mind, as enjoyable as they were), but check out Miyazaki’s entire catalogue, or Gankutsuou (this especially; the space theme was completely out of left field), or even the brief but excellent Cencoroll. In the case of Miyazaki, the main appeal of his work is how he teases us with the unexplainable. It’s like surreal poetry; images work together somehow and the meaning and logic behind those images are less important than the impression they leave us with. The quality of the examples I gave would be severely compromised if the writers were to suddenly provide exposition on their gimmicks. Sometimes half worlds are better off being half worlds.
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Your example on Da Capo is a direct hit, and my mind had completely skipped over that for some reason. Maybe it’s because, as you say, the Sakura tree is pretty much the only setting piece in that series. Of course, most of Da Capo doesn’t depart that far from the norm (except Miharu and her successor). The eternal sakura tree however, gave birth to the two pieces of drama that really made Da Capo worthwhile for me.

Well yes, settings can ‘talk’, but there aren’t many ways to do it outside blatant exposition scenes, and the informative content of those scenes are always… limited. So when you come down to it, you still have to ‘converse’ with the setting through another medium, as if it were a ‘character’ that needs developing.

This is probably the most bizarre example, but I was reminded by your banner. If the sakura tree in Da Capo were simply there to grant wishes and that’s it, it would be part of the premise (and in fact there are paths in the games that are like this). But when the nature of the tree, its interactions with the world, and the effect it has on all the characters in the story becomes a (the?) primary driver of the plot, it’s no longer just “premise” *even though* this example is clearly fantasy and not sci-fi (because the tree is basically “fate” or “god”). The characters actually have a relationship with the setting and this affects and even shapes their growth throughout the story. And because of this, the setting needs the same “development” that any character would have, but because the “setting” can’t talk*, others have to “talk” for it (hence the need for exposition). (Note of course that the tree is probably just about the only aspect of Da Capo that could be categorized as “setting”, so that’s why I recognize that it’s a weird example. It’s probably easier to discuss this whole thing with sci-fi examples rather than loose fantasy.)

* I say the setting can’t talk, but there are narrative “tricks” for this, of course. For example, the character happen to walk by a TV and the news is on and we “listen in” for a moment. But clearly, the main way the setting “talks” is through the characters’ struggles with it (either past or present).