The topic you are addressing has enormous ramifications which amount to an entire approach to communication theory. The best I can do in a limited reply is refer you to our Dramatica concept of the "Story Mind", as being that the underlying deep structure of any complete story is an analogy or model of a single human mind as it tries to deal with an inequity. In Dramatica theory, we see four stages of communication (creating the conceptual Story Mind in "Storyforming", encoding the concept into tangible symbols in "Storyencoding", transmitting those symbols over or through a medium in "Storyweaving", and finally the attempt by an audience to discern the symbols and pull them from the medium, decode them to their basic structural meaning, and reconstruct the Story Mind in "reception". Clearly, the Story Mind is present at all four stages, but in a different form. Similarly, we might look at the job the audience does in interpreting the story experience as having it's own four stages.
When you talk about placing subject and space in the sentences and paragraphs, this can occur in any single stage or any combination of stages. Each stage represents a different kind of topic being looked at, or a different point of view from which a topic is seen. Therefore, although we can say with confidence that subject and space are present in the work, pinpointing exactly where it occurs is actually impossible for much the same reason one cannot determine the location of an electron at the same time one is measuring it's mass. It is the old particle and wave problem, and that stems from our own brains' alternative organizations into spatial and temporal perspectives.
In fact, the issues you are bringing up are almost more pertinent to the psychology of the author, as opposed to the psychology of the story. Rather than go into more detail here, I suspect that you will find the information you are looking for by reading the material regarding the psychology behind Dramatica which is available on the Mental Relativity site, Storymind.com. Taking this in conjunction with the book, Dramatica: A New Theory of Story, should provide you with a good parallax on the relationship between the structure and dynamics of our minds and that of the stories we create.