When to use the two? Is the sentence "England is from where I hail" grammatically correct? (It sounds ok to me but it looks funny.) Or do I have to write "England is where I hail from"?
Both are grammatical, but the second is more usual. In general, this use of hail is not natural in normal everyday speech. It sounds as if the speaker is deliberately trying to make a statement sound less banal than it is, and not succeeding.
The term hail from is a phrasal verb
(hail from) have one’s home or origins in (a place): they hail from Turkey
It is almost always used in its exact form. While from where I hail would probably be understood by most, it would seem odd to most native speakers (at least in the US). This ngram shows an example of relative usage.
Even in its usual form, hail from is not very common in US English and would seem colloquial or archaic to most.