There are two businesses in Winchester Harbor where the characters live and work: the Channel Stop a combination marina / snack bar / boat dock / refueling location / motel, and Nate Kunkle's fishing boat charter business.
The exact location of Winchester Harbor is left vague in Winchester Harbor, though it's clear it's somewhere on Lake Michigan or Lake Huron. It becomes more explicit in Blanche Tickle Girl chapter 18:
- Matt decided that it was a little shorter to go north of Lake Huron, rather than around the south end. .... This meant heading northwest out of Winchester Harbor, crossing the Mackinac Bridge, and then going on up to Sault Ste. Marie to cross into Canada.
So Winchester Harbor is located on the Lake Huron side of Michigan's lower peninsula.