The SWAT theory manual does a good job of explaining most of the basic concepts and many of the details -- you have a lot of reading ahead of you.
But briefly, SWAT uses the HRU concept. In each subbasin, SWAT lumps all ares of the same land use, soil type, and slope into a single aggregate unit called a "hydrologic response unit" (HRU). I envision an HRU as a very large field, bordered on its downstream edge by the stream channel. SWAT does all its calculations of infiltration, runoff, sediment transport, nutrient transport, plant growth, etc., for each HRU. A subbasin may have any number of HRUs -- it depends on how many unique combinations of land use, soil, and slope there are in the subbasin, and how much detail you allow SWAT to see (you may tell SWAT to ignore combinations that are very small, for example).
So -- if your subbasin has 5 HRUs, I would envision it as 5 large fields, each sloping uniformly down to a stream channel, which receives runoff, sediment, and nutrients from each HRU. These components are then fully mixed in the channel and passed to the next downstream subbasin.
The HRU concept allows SWAT to use fairly mechanistic equations to calculate runoff and transport of sediment and nutrients. But of course the real world does not (usually) consist of uniformly sloping fields leading directly to stream channels. So models should be calibrated to real monitoring data to "scale" (or "fudge" as some would say) the model output to match the measured data, to try and account for all factors not explicitly modeled.
I tend to think that understanding the HRU concept is key to understanding how to interpret results from SWAT -- and should serve as a constant reminder to not over-interpret results.
Cheers,
-- Jim