Where to write the hooks?

You write the action hook either below or above the function. Stick with one way. I prefer it above the function so I can easily see. The functions.php is a good place for a theme. You can also use action hooks in plugin files etc as long as it gets loaded by WordPress. If you want to hook to an external plugin then its best practice to create your own plugin to hook. You can get away with hooking to the external plugin in your functions.php but if you deactivate the plugin that function is still being called so it may be good to wrap it with an if conditional and function_exists ( google or duckduckgo it ).

I posted an example functions.php hook below. hello_friend is the name of the function. publish_post is the action hook so when a post is published this hook will run.

<?php

add_action( 'publish_post', 'hello_friend' );

function hello_friend {
  // do whatever you want here
  return "Hello Friend.";
}

Can also be written below the function like this

<?php

function hello_friend {
  // do whatever you want here
  return "Hello Friend.";
}

add_action( 'publish_post', 'hello_friend' );

You could even have all your functions and the action hooks for all of them at the bottom of the file. This would be horrible to manage but I am trying to make the point it does not matter where the action hook is a long is as long as it can call the function.