I find it interesting that so many people don't place "Heroes and Villains" in the beginning. I couldn't see it any other way. I've always been influenced by Brian's comments from the period about studying classical composers and being inspired by "Rhapsody in Blue":
In western classical music, composers often introduce an initial melody, or theme, and then create variations. Classical music often has several melodic layers, called polyphony, such as those in a fugue, a type of counterpoint. Often melodies are constructed from motifs or short melodic fragments, such as the opening of Beethoven's Fifth.
[Rhapsody in Blue] is characterized by strong motivic interrelatedness. Much of the motivic material is introduced in the first 14 measures. David Schiff identifies five major themes plus a sixth “tag.” ... A rhapsody in music is a one-movement work that is episodic yet integrated, free-flowing in structure, featuring a range of highly contrasted moods, colour and tonality.
That lone flutter horn playing the main musical theme from "Heroes and Villains" (and then hearing it emphasized again by horns and keyboards throughout the song) reminds me of that concept of introducing a melody/theme in the beginning, especially seeing how Brian placed it right before H&V in BWPS. This structural style is reinforced by most of the SMiLE songs being musically derivative of H&V in some way ("episodic yet integrated ... a range of highly contrasted moods, color, etc." describes the album for me). Additionally, lyrically, a lot of the cornerstone songs have their basis in H&V. The storyline of a girl caught in a rain of bullets yet still carrying on fits with how many of the songs (like "Wonderful" and "Cabinessence") seem to refer to an ambiguous girl, a symbolic sentiment representing America and its evolution. Leaving the city for a town in the wild west introduces the concept of expansion. The reference to children does as well (settlement), but it also segues into the concepts later touched on by "Surf's Up". The majority of the album, to me, is a series of variations on that opening theme. Brian obviously felt it was very important to the album, spending so much time on it. Releasing it as the first single from the album would've been a great way to introduce people to the radical nature of it.
I feel "Surf's Up" must be near the end of the album because it's the one "major" SMiLE song that really strikes out on its own from H&V, creating its own universal theme that stands independent from Americana. It's jarring near the beginning or end. Well, maybe one could figure out a way to make it work in the beginning, but that would be anticlimactic to me. "Child is Father of the Man" spins off that concept musically and lyrically, and so to me would have made a nice link from the H&V variations to "Surf's Up". The instrumental imbues feelings of something massive.
The whole "Elements", healthy living, and country themes tie into the "I'm in Great Shape" and "Barnyard" themes, both of which appear tied to the initial concepts of H&V (based on the demo, along with conjuring up ideas of expansion, settlement, and the frontier touched on by the song). Unfortunately, parts of those themes seemed to have been lost in the shuffle during the 66/67 sessions, though, and were never closed to being finished. That's what always made it difficult for me to configure those songs when I tried doing "fan edits". The way things were done in BWPS made it all feel like a haphazard, colliding collection of different themes, which I guess is what the original album was turning into once Brian lost focus.
Of course, I'm not trying to say that my views are correct or definite or anything like. Those are just my opinions on how the album was. I could be way off on how Brian imagined the album both in the 60s and today.