Only Seth knows for sure why he set Family Guy in the fictitious town of Quahog RI.
He did go to art school in Rhode Island so apparently he liked the area.
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Peter Griffin of Family Guy lives on Spooner Street in the fictional city of Quahog, Rhode Island. (That's pronouced "KO-hog", if you've never heard it on the show. A quahog is a kind of clam.)
No not one in America anyway but spooner street exists and that's where seth mcfarlane grew up
Technically, Cleveland leaves Quahog in episode one of The Cleveland Show, but the last main appearance of Cleveland in Family Guy was in Road to the Multiverse where he is a Disney-style skunk in the Disney universe. He is mentioned in the next episode, Family Goy, as having left.
North By North Quahog - ENJOY!
He ice skates in And the Wiener Is & roller skates in Hell Comes to Quahog