Loads are associated with each element. The fluid density defined for the pipe element develops load on that element alone.
This works well in most models but you highlight an issue will tall risers.
Think of the fluid as "sticky" - it sticks to the pipe and does not seek the lowest point.
Note too that fluid head does NOT change pressure. Your input values for pressure (P1, P2, etc.) are used directly.
Also, watch out for pressure thrust loads on (untied) expansion joints. We place a thrust load on either end of the XJ rather than at those up- and downstream surfaces where the pressure loads are truly located. There are many posts here on this topic.