relation clause

First of all, just want clarify that the sentence you quoted is called a relative clause, not relation clause. The sentence can be split into 2 simple sentences like this:

1. The hotel was near the station.
2. We stayed in/ at the hotel.

Actually relative clauses can be classified as defining relative clauses and non-defining relative clauses. The one that you've quoted is a defining relative clause, which means that the relative clause (where we stayed) is necessary for defining the subject (the hotel), without which we cannot know for sure which hotel you're talking about.

Also, you may use another relative pronoun to rewrite this sentence:

1. The hotel in/ at which we stayed was near the station. (more formal)
2. The hotel which we stayed at/ in was near the station. (less formal)

Here, since the relative pronoun [which] can only substitute the noun [hotel], you still need to include the preposition [at/ in]. But if you're using [where], the whole phrase [in/ at the hotel] is substituted, and that's why you don't have to include a preposition in your original sentence.

the hotel, where we stayed, was near the station.

We can always detach the part (within the commas as one sentence

The other one will be Where = the hotel
The hotel we stayed.
The hotel was near the station.

The man, whose name is Tom, is my classmate.
The man is my classmate.
The man's name is Tom.

We stayed the hotel .
The hotel was near the station .