The word location is derived from the verb locate and implies some degree of searching.
"Where is it located?" is pretty much the equivalent of "Where's it found?" or "Where would I find it?"
As in -
In California, some of the best architecture is found in
A place, as you've correctly noted, is more concrete, i.e. something that has geographic coordinates.
Let me try to confuse you even further:
Places are usually found, whereas locations are determined or established.
What would be the best place for a piano in a house?
What would be the best location for a piano in a house?
Your initial assumption works.
Placing a piano somewhere means transporting it there.
Locating a piano means seeing, after a bit of searching, where it's already been put.