What is the difference between the Method and Experimental Setup section
The answer to this question depends a little on the field of application.

Method

In fields like computational sciences, this is the section where you describe a set of algorithms to be implemented. In fields like material engineering and life sciences you describe the general procedure to be followed to solve the problem defined in the problem statement. General in here refers to more of an overview of your implementation rather than its deeper aspects.

Experimental Setup

This is where you explain the implementation aspects in detail. You where and how the algorithms are applied in computation. You depict the use of instruments, apparatus, and other tangible items in material engineering and sciences. 

In short, I presume your supervisor wants you to give a breif overview of your implementation in the Method section and would like you to explain it in detail in the Experimental Setup section. However, the level of detail can vary widely among the above sections.