The setup aims at improving the playability of the guitar. This is quite a comprehensive service.
It's what every guitar needs, old or new, in order to be easy and fun to play.
And yes, even brand new guitars often need some TLC straight out of the box. Or maybe you want to change string gauge which means different tension, therefore different neck relief, and so on and so forth.
The setup includes the following:
Fretboard cleaning and conditioning
Restringing (cost of strings not included)
Checking and adjusting neck relief
Setting string action
Setting the intonation
Tremolo balancing (if applicable)
Checking nut slot depth
Consulting with you if required
Checking for high/low or scratchy frets and fret ends
Consulting with you depending on the results
Setting pickup height if necessary