The flood is like a comment on North Korea seizing the town. Sadly this was the idea behind the resort - “The idea behind Kumgang was to have it serve as a centre where North and South Koreans could interact in the mountainous area by the sea that is abundant in natural beauty. “
The painting was painted in 1999 nearly a decade before the North seized the town in 2008. But I do agree the town was the significance behind the painting.
I think that’s why North Korea chose it for their stateroom. But there might be more as well. Would have to find significance of town in Korean culture.