The hill, for Jonas, represents a gateway to Elsewhere.
It signifies his realization that outside his community there is a world not dominated by Sameness.
Later, Jonas dreams of the hill and feels the need "to reach the something that waited in the distance," something "good…welcoming… [and] significant." Yet, through memories of the hill, Jonas learns the precarious relationship between joy and pain; without one, the other cannot exist.
Jonas's first experience with real pain is falling off the same sled that thrilled him only days earlier.