"Where do the horses live?"
Translation:Hvor lever hestene?
Leve is simply being alive as an organism. Bo is more specific in the sense that you have some sort of specific dwelling (house, apartment, cave, etc.).
So "I live in an apartment" would be "jeg bor i en lejlighed".
Yes, but isn't this sentence talking about WHERE the horse lives? Why would it be lever?
Horses usually simply exist somewhere, without owning any special form of house etc., so they don't really 'live' there, they just happen to usually end up on that place. I hope this made sense
Farms and stables places where horses dwell, right? In the past horses "existed somewhere...", in the present is difficult to say that.