I am struggling to find the answer as I return to my WiP after the holidays.
In my experience as a reader (which is certainly much broader than my experience as a writer) the relevance of location can be categorized in one of three ways.
In some novels, location is tantamount to the story and a different city or country may result in a new novel. Think of Dan Brown's works - without Rome, Angels and Demons would be a different experience. The same applies to The Help.
In other novels, you could change the location without anyone even noticing - this is especially true in novels that focus on the journey of the main character and everthing else is secondary and provides only shades of enrichment to the story. The Memory of Running by Ron McLarty falls into this category as does Speak by Laurie Halse Anderson.
The most difficult one, of course, is the one into which my WiP falls, along perhaps with the majority of novels. The place and time are too intertwined with the story and provide an amount of detail or explanation without which it no longer works - or works differently than intended. Novels I see as falling into this category include Milan Kundera's Slowness and Janet Fitch's White Oleander.
And my WiP. It is set in Eastern Europe. The average reader would probably prefer a setting in the US, but I feel that my story (and my character's journey) is too intertwined with history and place and I can't change it without losing meaning.
Better to loose (potential) readers than the story.