Well, I believe Jefferies is quoted as saying something like 'I figured if the engines could warp space they needed to be away from the crew' so he put them out on pylons and relatively far away from the hulls. You can see on some of his earlier sketches that the nacelles were relatively close to the hull.
It is rather debatable where he meant for actual power generation to take place. I do recall reading another quote from him where he felt that they didn't need a gigantic engine room set (a feeling which he capitulated to the Powers That Were) which might confirm his belief that the power components would be entirely in the nacelles. Alternatively, it may have just meant he thought the technology would be so sophisticated it wouldn't require constant or direct monitoring.
I think both of these came from the 'Star Trek: Sketchbook.' I'll reread and report.
To more directly answer the OP, I would say that the in-universe reason the warp core is in the hull because it does indeed require such constant adjustment and monitoring. The real world reason is of course that it adds drama, which is also probably why the producers wanted the engine room despite Jefferies finding it unnecessary.