"I am already in Russia."
Translation:Я уже в России.
The spelling depends on the case, not the position. If it did depend on the position, then wouldn't the position give you all the information you need, making the spelling redundant?
The reason «России» is spelt that way is because it's in the prepositional case, as it's being used with the preposition «в». In fact, other cases can be used with «в», but it changes the meaning.
В России - In Russia - Prepositional
В Россию - To Russia - Accusative
В России - From Russia - Genitive
Note that the prepositional (and dative) case(s) for this declension (second declension) would usually end in «е», but words ending in «ия» are exceptions, and change to «ии», making them indistinguishable from the genitive case.
Regarding cases, it only takes a little light reading and practice to get the hang of them. In Russian, there is no substitute for understanding the case system.
This page explains them well, and acts as a good "cheat sheet" for the four main declensions of Russian nouns. - http://www.alphadictionary.com/rusgrammar/case.html
This page is a good "cheat sheet" for case functions, to use for quick reference - http://www.alphadictionary.com/rusgrammar/casefunc.html
Ask yourself "What case is that noun in?" every time you see a Russian noun, and, in conjunction with these "cheat sheets", you'll get it in no time.
I can't say 'уже в России' because I have to specify the person in this case because there is no surrounding context. If someone asks me, where are you, can I respond without specifying the person, though? (So, could I use 'уже в России' in response to 'where are you', but also 'where are s/he/they'?)
It's an exception. When a stem ends in -и-, the prepositional case ending is -и: for example, в Буря́тии 'in Buriatia', о магно́лии 'about a magnolia', на Еврови́дении 'in Eurovision'.
Yes, it’s ungrammatical. Russian nouns have several forms called cases, and the nominative case (Rossiya) can’t be used after ‘v’.