The physical setting, given the types of plant and animal life, I would assume is on earth, but definitely not in Japan. Just because it is an anime/manga series, it doesn't mean that the setting must always be exclusively in Japan.
It seems to be in more of a rural, European area. The reason I say that is because the architecture of the buildings seem to have more of a western world design, and the occasional runes that one would see whilst focusing on the background of certain episodes/chapters tend to look as if they were more from the middle ages or the Renaissance period than feudal era of Japan. If I were to be a little more specific, I would say somewhere in the northern UK. Also, yes there are scenes in which it seems like they are in a very busy town, but the surrounding area suggests that it is in a northern wooded area that's rather secluded.
As for the time period, I would like to say that during the recent events in the series (meaning when it's not a flashback moment) the time period would be somewhere between the mid 90's and mid-2000's. This is because though it seems like there is recent technology in the town area, there doesn't seem to be any trace of the new technology that we have today such as smartphones and tablets.
The vampires themselves I would also assume are not Japanese, but European with the exception of Shizuka Hio. The fact that many of the names are Japanese could be the fault of the author for not taking in to account that he set the characters in a European-like setting.
When one steps back and looks at the age of the vampire race that the series suggests and compare it to that of the history of Japan as a country, the vampires have a longer history and have been around longer than the country of Japan has. The purebloods would be no doubt from one ethnic decent such as English or French while the nobles could have more than one ethnic decent. The physical traits of commonly having blond hair and blue eyes suggest that German decent is common.
The "level E" vampires are what I assume to be just what the series describes them as. As for where the vampire race came from in general, I'm not entirely sure, but I do have a theory that their origins are similar to that of the main characters in the movie Hancock starring Will Smith & Charlize Theron.