Translation:In the city where we live, there are many houses.
I second that question. Sounds perfectly right to me (who's non-native in English).
In Swedish, there is no verb conjugation based on who the subject is within a tense. So, for example, it is Jag dricker ( I drink), Du dricker (You drink), etc. Because of this, det finns means both "there is" and "there are."
Why is it "finns det" and not "det finns"? Is it because the V2 rule makes "finns" come first?
Yes, it's the V2 rule again. In I staden där vi bor finns det många hus., the first constituent is a subclause, I staden där vi bor. This takes up the first place (you could replace it with 'här'), and then the verb must go right after that.
Well, the corresponding question word is "Var?" :). "När?" means "When?".
The general guidelines today talk about tydlighetskommatering – commas should not be placed solely for grammatical reasons, but in such a way that it makes the text easy to read. There's a book called Svenska språkregler that explains things like this in more detail.