Where do I start? Let me see...
Like the US, Brazil is also formed by states and a federal district. Florianópolis is the capital of one of the states (Santa Catarina). Although this particular state is not among the most important ones, being a capital alone makes a city relevant in Brazil.
I'd say Florianópolis is mostly known because of its beaches. Tourism is big there (by brazilian standards, I mean).
You ask why the tournament will be held there... Well, lot of us brazilians asked the same.
The official statement says São Paulo already has the ATP one. So it was never really an option for them.
And Rio has bought the Memphis tournament for next year. Rumour has it that both ATP and WTA are coming.
So, why Florianópolis among all others?
Because tennis is a bigger deal there than in other medium cities in Brazil.
Let's not forget it's Gustavo Kuerten hometown!