"A good artist should be isolated. If he isn't isolated, something is wrong"

This quote recommends that artists need time and area to focus on their work and needs to not be sidetracked by external aspects or other individuals's viewpoints. It implies that isolation enables the required imagination and self-questioning required to produce great art. Welles might be recommending that if an artist is not happy to be alone with their craft, they may not be fully dedicated to producing their best work.