I'm getting the impression of like a post-apocalyptic technological earth-like world that now has magic. Am I close?
Yep, that's pretty much it.
It's actually supposedly earth in a far-future post-ice-age world where a lot of the buildings from the modern world have been preserved by the snow and ice and are just now becoming accessible again. The earth has great scars and clefts in it, leading down into huge deep caverns, and all recognizable landforms and landmarks are essentially gone.
The exact year is unknown by any of the survivors, but it's far enough in the future that there are actually some very sci-fi future elements in parts of the world, too. Most survivors have managed to stay alive thanks to the magic that surfaced between our time and theirs, and these tend to be alone or in exceedingly tiny groups due to the prevalence of roaming monsters that climbed out of the earth. However, there are some groups that survived in larger numbers by using very advanced technology that looks somewhat alien.
In a lot of respects, the setting was inspired by the classic game Crystalis on the NES, which was always a favorite of mine as a kid. And I think the setting for that game was at least partially inspired by Nausicaä of the Valley of the Wind, which is a more recent discovery and favorite of mine.
Really, there have been a ton of Japanese games which have a setting that can be summed up as "when magic and technology collide," and that's always been a favorite theme of mine since the 80s. Then Final Fantasy VI included similar themes (and Chrono Trigger, really), and there was just no going back. I was less enamored of VII than most, and didn't play it until three or four years after it was out (and actually never finished that one), but I think that a lot of my trouble with that was that it was more sci-fi and less fantasy. I like sci-fi as well (my favorite books are almost all sci-fi, for instance -- and obviously AI War is), but my favorite thing about blending sci fi and fantasy is when the fantasy is more predominate. And post-apocalyptic has always been my thing.
Anyway, there was so much that I loved in a lot of NES and SNES classics that had these settings and themes, but there haven't been any more recent games that really delivered on the same mix. It tends to be straight fantasy or else a much heavier sci-fi element. AVWW goes back to the stuff I most loved as a kid, and expands on it a bit.