noun
heart of a mountain; deep in the mountains
Poetic or literary word for a secluded, deep mountain area, as if embraced by the mountains.
その小さな村は山懐に抱かれている。
The small village is nestled deep in the mountains.
山中 is a neutral, everyday word for 'in the mountains'; 山懐 is more poetic and emphasizes the deep, embracing quality of the mountains.
Compound of 山 (mountain) and 懐 (bosom, heart). The reading ふところ is the kun'yomi of 懐, giving a native Japanese feel. The exact historical derivation is uncertain, but the word evokes the image of being held in the bosom of a mountain.