Mood is the overall emotional valence of a piece of writing. It is especially important in narrative, as it can be a strong way to appeal to your readers.
Works through pathos, from the 3 appeals, by producing an emotional tone of the work in your readers mind.
The mood of any piece is going to be determined by the content you want to convey. If you are writing the story of someone dying of cancer, you are probably not going to want to establish a whimsical mood. Similarly, a story of getting a new puppy is not going to be somber.
You would not begin the story that had a happy mood with “it was a dark and stormy night” unless you want to play off the dark mood this establishes by contrast.
If your mood is off, your audience is going to be confused by the content of your narrative.
Look at these opening lines and let’s talk about mood:
Neuromancer by William Gibson:
“The sky above the port was the color of television, tuned to a dead channel.
‘It’s not like I’m using,’ Case heard someone say, as he shouldered his way through the crowd around the door of the Chat. ‘It’s like my body’s developed this massive drug deficiency.’ It was a Sprawl voice and a Sprawl joke. The Chatsubo was a bar for professional expatriates; you could drink there for a week and never hear two words in Japanese.
Ratz was tending bar, his prosthetic arm jerking monotonously as he filled a tray of glasses with draft Kirin. He saw Case and smiled, his teeth a webwork of East European steel and brown decay. Case found a place at the bar, between the unlikely tan on one of Lonny Zone’s whores and the crisp naval uniform of a tall African whose cheekbones were ridged with precise rows of tribal scars. ‘Wage was in here early, with two joeboys,’ Ratz said, shoving a draft across the bar with his good hand. ‘Maybe some business with you, Case?’”