Please find answers to the various sub-questions below :
1) He creates the dreary mood by using words to give a vivid description; words that paint a mental picture of the dilapidated state of the Valley of Ashes as well as a description of the type of people who live there. This vivid description helps gives the reader a mental picture of the place.
2) The author uses the word 'Ash' in a very descriptive way in chapter 2. Just as ashes represent the smouldering decay/embers of fire, the Valley of Ashes signifies the rot and hopeless situation of a place which has become a dumpsite of sorts.
2b) He likens the place to a farm where ashes grows like wheat; where moulds of ash are as high as houses; where men covered head to toe with ash work and walk slowly and sluggishly without motivation.
But perhaps the strongest piece of textual evidence is the description of Mr Wilson, the husband of Myrtle. The author describes him as 'spiritless' - almost lifeless with hair and clothing covered turned gray by the ash
3) The train stops at the Valley of Ashes because it is along the route that connects the Industrialised West Egg and East Egg. It is strategically located as a connection point located half way between industrialised West Egg and East Egg.
4) This is the setting where Nick meets with Tom's mistress because the said mistress Myrtle Wilson, lives with her husband George Wilson Above a gas station in the Valley of Ashes
5) The dilapidated billboard showing the mighty eyes of Doctor T.J Eckleburg overlooking the Valley of Ashes symbolises the eyes of the Almighty who is watching and seeing the ongoing activities, people, rot and decay of the Valley of Ashes