I thought you just lap the circuit and real road simulates the rubber going down thus increasing grip like in RL
Helps with more cars practising the same circuit at the same time of course.
Edit. If you mean by car setup it would be to lower and stiffen suspension, increase camber and toe out add more downforce front and rear depending on over/understeer. There is also bump and rebound but I still haven't got my head around these settings yet.