Why did Shakespeare use Rome as the setting for his play Julius Caesar?

The obvious answer is that Rome is the actual place of Caesar's assassination, and Shakespeare--while he takes some historical liberties--does try to present the assassination and the preceding/following events relatively realistically.  He consulted Plutarch's Lives for the play.

Symbolically, the political issues and Shakespeare's discussion of chaos's negative effects upon individuals and empires fits Ancient Rome's political arena.  The idea of individuals fighting for ultimate power (Caesar or a king) against a republic government not only occurred in Rome, but it gives Shakespeare and opportunity to discuss how these same issues affect the British Empire.  Moreover, Shakespeare portrays the commoners in Rome as clamoring for a king, and uses the far-away setting to hint at how his own people should feel about their own kings and queens.