Moblins are basically bull-dog/pig like warriors with spears. They wander around the Lost Woods killing things.
This is official artwork of a moblin from Zelda 1:
Here is official artwork of a moblin from Ocarina of Time (this is the game in which this story is based, so the moblins should look the most like this):
Here is a moblin from the most recent Zelda game, Wind Waker:
I hope that helps.
As for the setting. Imagine ancient ruins of the sacred Forest Temple in the middle of a dense overgrown forest. Look at the stump in the picture I used before to get a feel for how it looked where Saria was sitting, and where she eventually passed out. She is surrounded by crumbling walls, and somewhere behind her is an overgrown Temple, it's entrance blocked by crumbling walls, and overgrown forest. The wall Saria was trying to climb up is grey, with vines growing up and around it.
On the other side of the wall, is more maze like ruins, even more dense and overgrown than the open area Saria had started. Saria had to run through the maze a bit to get to the hole in the wall, that eventually led out of the maze to where Link was. The whole is also overgrown with vines and plant life, but large enough for a child, or small girl (like Saria) to squeeze through.
Lighting should be limited, despite the fact that it's daytime, as the canopy of the forest is dense and also overgrown.