Ok, I found a translation into English, and the sentence is: "She stood with her back to me, looking out past the courtyard to where a group of cottages and gardens, each enclosed by its own picket fence, crept up a hill until the outline of a quarry cut them off".
So your intuition was right, it's just small houses in big gardens. For me, how the sentence is made in Spanish is rather unexpected, but since I'm incapable of translating, and since Kundera is a difficult author, I won't criticize the translator.
