Setpatch enables the AGA modes.
Yes, C:SetPatch from v3.x is required to enable AGA modes.
Until C:SetPatch is run, the AGA is disabled, since when AGA is enabled, there are additional restrictions to the internal memory alignment of bitmaps (from x2 byte to x16 byte row alignment) that are incompatible with OCS/ECS games.
Similarly, if you want to use the other features of SetPatch, but need the old OCS/ECS compatibility, use the following line in your S:Startup-Sequence:
C:SetPatch NOAGA
This will disable the AGA support, and allow more old games to run from Workbench, but you won't have access to AGA modes.
(If you're booting a game from floppy, this doesn't matter, since the game will probably not care about the various driver fixes in SetPatch).
One thing I like to do is to have a special 'NoAGA' bootable (> Install DF0: ) floppy for Workbench games that require OCS/ECS bitmap alignments.
(The 'LoadWB' at the end is for a 'minimal' Workbench - if you like, you can replace that with 'Execute S:Startup-Sequence' to run HD0's startup-sequence)
:C/Assign (any AmigaOS)
:C/SetPatch (from v3.x)
:S/Startup-Sequence
C:SetPatch NOAGA
Assign SYS: DH0:
Assign C: SYS:C
Assign L: SYS:L
Assign Libs: SYS:Libs
Assign S: SYS:S
Assign Devs: SYS:Devs
Assign Fonts: SYS:Fonts
MakeDir RAM:T
Assign T: RAM:T
LoadWB
EndCLI