Some thoughts for 5e new setting creation, by someone who has been around the block a few times. This isn't a post to tell you exactly what or what not to do, or to detail New Jersey in this new world for you, more to get the wheels turning in your mind.
Rule 1 is that the ultimate purpose of a setting is to ensure your players can have fun in it. You can have a world that's a town and a dungeon that's "nearby" miles away and it can be perfectly serviceable. Too much detail into things that the players will never interact with, such as the lifecycle of a particular species of flower, or the marriage customs of peasants half the world away, may even actively detract from your setting by taking your focus away from what your players are going to be doing. On the other hand, having too much be bare-bones can be challenging, unless you're good at improv and have a good memory or can write everything down to maintain continuity. Worldbuilding for an RPG, I find, is a balancing act between high-level ideas and the nitty-gritty details. I know people who find that balance by thinking up a campaign and designing the world around that. I know others who take a section of their world maybe 200x200 miles in size, or smaller and detail out likely places for settlements and let various ideas and customs build out from there. I even know a few that start with a blank hex map and RNG towns, rivers, governments, law levels, etc using tables. It all depends on what works for you.
The tricky thing about worldbuilding in D&D (particularly) is the influence of magic on the world as a whole because it's so kitchen-sink-y. High level magic users in 5e, while not quite as broken as in 3.5e, still have the ability to drastically reshape a society, both through their spells and the creation of magic items that allow regular people to ignore typical hazards. For example, a Decanter of Endless Water can allow for a thriving town (or city if there are multiple) in the middle of a desert where traditional attacking forces will have a difficult time reaching without similar magic items or teleportation circles, both of which will require some sort of mage backing to acquire. A 10th level druid with goodberry can feed 150 people per day, which can mostly negate the effects of a famine or siege on a mid-sized town. So there's a good chance the world is mostly under the control of high level magic users, because people with that sort of power tend to get their way.
If you want a traditional fantasy setting, you need to either come up with a reason why things aren't that way. Is magic rare? But then why aren't those with that potential sent to training schools to master their arts and offered steady employment instead of bumming around taverns looking for odd jobs? Is magic outlawed? But then what happened to the existing powerful magic users at the time of that decree and how do "normal" people punish those insurmountably stronger than them if they ignore that rule? Is there a "level cap" that's difficult for most magic users to overcome? But then how have the PCs done it, especially replacement characters in case of a death?
Granted you can always ignore all this and most probably none of your players will care. But in my experience you'll have to do a lot more fine combing when creating sessions so there's no absurdly easy out for a situation that sucks out all the drama and excitement for the players. "We stick around the town distributing goodberries and we wait and we wait and we wait and we wait until the invading army gives up trying to break through the wizard-fortified walls and goes home" isn't very exciting, nor is it particarly fun.
