This is admittedly just spitballing and mental gymnastics--but another way of saying where something is located is saying that it is "situated" somewhere. By extension, a "situation" can also mean location (as seen in this dictionary definition):
- the location and surroundings of a place. "the situation of the town is pleasant"
- synonyms: location, position, spot, site, setting, environment; technicallocus
I don't think it is often used this way in English, but it seems the Swedish word keeps that association.
I'm comfortable with the fact that the English word situation can hold both those meanings. I take it from your final sentence that Zmrzlina's comment that the two Swedish words läge and situation mean the same thing does apply to both meanings: location and state of affairs. Cheers.