That's a good photo. Yes, I agree it says Nikolsburg. They could be up on the Turold hill, which is part of a geopark with caves.Did you notice there was an older brother Franz on the census, who was also of an age to fight? Perhaps he is the other man up on the hill.
I don't speak Czech and my German is not brilliant, but I have a bit of experience with Czech archives although my ancestry is more from northern Bohemia. Let me know if you need any more help.