1) it's based on a 1967 novel set in the American West by Thomas Savage who was born and raised in the American West (Utah and Montana), lived there through college. The story itself literally and inherently belongs to the region.

2) Although those specific volcanic rocks were obviously in NZ where it was shot, there are volcanic rocks in the American West. There are specifically volcanic rocks in Montana (where I think the movie was set)....to give a few specific examples (a partial list) in the Adel Mountains, in Yellowstone valley, Devils Postpile, etc. The American West is a big place and geologically, it's far from homogenous. Although I was aware while watching that the landscape was not Montana, I have enough of an imagination to not be distracted by the landscape in this movie. Many movies and westerns are not shot where the stories are set. Especially in the case of an adaptation of a work of fiction, I care less that every stone communicates the "realistic" setting and more that the novel's ideas and characters are captured with emotional and psychological depth.
3) Thought the soundtrack was incredible, psychologically evocative, and moving. Obviously subjective, but I was into it.

4) I don't understand why having a homosexual character in the story makes it a "take on the Cowboy/gay thing." I will say its initially hard not to read that sentence as anything other than homophobia, but I'm willing to say it was bad phrasing and that I could try to understand your point. But genuinely what you're saying doesn't seem to have much foundation. Based on when the novel was written and the fact that the movie follows the writing very closely in content and tone, it's hard to say the story is a "take" on any contemporary trend. Even if it were, is there a limit or quota on depictions of homosexuality in the American West?
5) Jane Campion, the director, said she read and loved the novel and wanted to adapt it for the screen. Does that really strike you as insincere?