The initial situation of Watership Down is (a) they are living in Sandleford Warren; (b) Fiver knows that the warren is doomed; and (c) not all of the rabbits are totally happy with Sandleford Warren. So Hazel organizes an expedition to leave their comfortable home in Sandleford to find a better home… somewhere else.
Sandleford Warren may be doomed, but at least you can be comfortable there while you wait for death. Out in the wider world, Hazel's expedition faces lots of new dangers, including a badger, a dog, a crow, a road, a human, a river, some owls, and eventually Cowslip's warren. Cowslip's warren is probably the worst part of the journey because it seems at first like a place they could call home. And then we learn that it's deadlier than anything they've faced. So they need to go on and find a new home.
Watership Down Warren does not have the best relationship with Efrafa Warren: there's the failed diplomatic mission lead by Holly; the escape with the does; and then the war against General Woundwort. This relationship is the climax for us—even though it's a long, long climax—because it shows (a) how different these two warrens are; and (b) how far Hazel's rabbits are willing to go to create and protect their new home. Put it this way: when Sandleford Warren is threatened, Hazel leaves his old home; but when Watership Down Warren is threatened, Hazel is ready to run any risk to save his new home.
Bigwig and Hazel come really close to dying in order to protect Watership Down Warren from Efrafa Warren: Bigwig faces Woundwort, while Hazel is dealing with a dangerous dog and cat at Nuthanger Farms. But in the end, they all live, thanks to their (almost) sacrificing themselves and to the help they receive. In particular, Hazel gets help from some very nice people, which is a nice contrast to how Sandleford Warren ended up.
After all that work to find and protect a new home, the story ends with the death of Hazel and the survival of his new home. So even though Hazel dies (of old age), it's a happy ending because he succeeded in his goal of founding a new home where rabbits could be at peace. And we know that this is the correct cycle for the rabbits' life because the story ends with the primroses blooming—which connects to the opening the book, where the primroses were done blooming. Cue "Circle of Life".