a very agreeable situation located within two small hills in

你把which换回hills就好理解了：In the middle of the two small hills flowed a great river.这句子看得懂吧?这是一个倒装句,就像“山顶上立着一间房子.”：At the top of the mountain stands a house一样,许多谓语动词是不及物动词的句子,把地点放前面去了之后,常用全倒装句型.
至于第一个问题,回答是不能.因为有些句子,如：I cannot find the house which I used to live in.能把介词in放前放后都行是由于从那定语从句本身的正常顺序来看,该介词本来就应该在后面,是在变定语从句时才被提前的,而楼主题中的定语从句,用了倒装,其本身顺序就是把in the middle of which(which=two small hills)放前面的：In the middle of the two small hills flowed a great river.因此不能放到句尾.

we arrived at a house, in front of which stood an old man.从此句可以看出， 介词in front of + which 一起引导定语从句，不能分开；同时in front of which 是地点状语， 地点状语在前，要用完全倒装句型。
如at the end of the street stood a bookstore.

in the middle of不可放到句尾，它与which一起构成定语从句的引导词，一般不宜拆开。
flowed a great river倒装只是为了保持这个定语从句的平衡，也可说成a great river flowed. 这种用法只有才主语是名词，谓语又是不及物动词时才可用。比如说这里把a great river换成it的话，就只能说成it flowed,而不能说成flowed i...