to quickly establish the tone and mood
In a gothic story, the setting serves to reinforce the atmosphere or mood of the story. Gothic stories are usually set in spooky old mansions or on the desolate moors or somewhere else equally spooky.
suspense and tension
An author could use a familiar and ordinary setting to create a sense of complacency or predictability in the story before introducing a twist ending. By lulling the reader into a false sense of security with the setting, the unexpected ending can have a greater impact.
An author can use descriptive language, sensory details, and world-building techniques to affect the setting of the story. By painting a vivid picture of the environment, the author can immerse readers in the world of the story and evoke specific emotions or reactions.
by having a character not fit in or be at odds with the setting
An author's use of foreshadowing in a gothic story can help create suspense, tension, and a sense of impending doom. By hinting at future events or outcomes, foreshadowing contributes to the eerie and foreboding atmosphere typical of gothic fiction. It adds a layer of anticipation and intrigue for readers, drawing them further into the narrative.
by having a character not fit in or be at odds with the setting
You've got this backward --- the title comes last. Write the story first and you'll have your title when you finish.
I don't see why that wouldn't be allowed. Wilkie Collins uses first person in his gothic short story 'A Terribly Strange Bed'
The setting of a story will tell the reader about the environment the characters are in. An author will use words to describe the sights, colors, and sounds to paint a picture for the reader.
setting
by having a character not fit in or be at odds with the setting