Learn Finnish: Missä ystävä on nyt? - Where is the friend now?

Both are actually correct! In Finnish, you can often put the subject (ystävä) before the verb (on) in questions that start with a question word. Missä ystävä on? sounds very natural and focuses slightly more on the friend, while Missä on ystävä? is also fine but can sometimes sound more like 'Where is a friend?' depending on the context.

Does missä literally mean 'where'?

It translates to 'where', but it specifically means 'in what' or 'in where'. It is built from the basic question word mikä (what) combined with the ending -ssä (in). You use missä when you are asking about a stationary location, meaning where someone or something currently is.

How do we know it translates to 'the friend' when there is no word for 'the' in the sentence?

Finnish does not have articles like 'a' or 'the'. You have to figure out which one is meant from the situation. Because the speaker is asking where this person is right now, it makes the most sense in English that they are looking for a specific, known friend ('the friend') rather than just any random friend.

Can I move the word nyt (now) to a different part of the sentence?

Yes, you can! Finnish word order is very flexible. You could also say Missä ystävä nyt on? without changing the core meaning. Moving nyt around mostly just shifts the emphasis, though the question word missä almost always stays at the front.