Note that this map is a pure top-down view. The area in between Shadewater Bay and the hilltop rises sharply, averaging about a 45 degree angle (slightly less so in Stubtoe, more steeply in The Dwarfwood). The area to the south of The Rosestone drops somewhat, but nowhere nearly as sharply (about 10-20 degrees) until the southern wall, after which it falls away dramatically at nearly a 90 degree angle about 900 feet to the Backwash.
The area showing The Rosestone effectively marks the area where it begins ascending too steeply to support further building – it is not an actual sharp wall, but the change to its sheer sides does occur over a fairly short distance. The lower slopes on all sides are covered with thick short bushes and small trees (sort of vertical forest-esque) before it becomes bare stone about 200-300 feet up (the Rosestone rises about 1000 feet above the hilltop).