OS X Server: How/where is the server app changing the Apache configuration?

Since you mention Server App, I assume your OS X is Mountain Lion. The actual apache config is at the following location

/Library/Server/Web/Config/apache2/

Virtual host config is in

/Library/Server/Web/Config/apache2/sites

You are probably looking at /private/etc/apache2/ or /etc/apache2/, which is not being used.