This is the Palace. The gardens stretch on forever behind.
A couple of Notes about this story's setting.
It's set in a world where Equestria exists with all the other countries of the world. No humans, just ponies.
It's set in the region of Campania, southern Italy. All the places mentioned are real.
Via Toledo is a real street in Naples.
The bay described is the bay of Naples. The massive volcano is Mount Vesuvius. The ruins of Pompeii aren't too far away, although they can't be seen from Naples.
The peninsula described is the peninsula of the Amalfi Coast. The two towns mentioned to be clinging to the cliffs are: Vico Equense and Sorrento.
Caserta is a real town just north of Naples and it has an impressive palace with a long history. It can also be seen in Star War Episode One as Queen Amidala's palace.
This is the Palace. The gardens stretch on forever behind.
This is the entrance where Twilight sees Cadance.
About the shady ponies selling stolen saddle bags. It's pretty common to see in Naples and just about anywhere else in Italy people on the side of the street selling Prada, Gucci and all the other top end fashion bags and wallets.
The Camorra is the Mafia of southern Italy. Sicily doesn't count, they had/have a different one.
And yes, Naples has a trash problem very unfortunately. The description is if anything slightly downplaying it.
Why is the story set here? Mi Amore Cadenza is Italian for I love Cadance. So I thought it wound't be too much of a stretch that she is of Italian origins. Also I just wanted to ponify Italy.