Is refraining from sitting in a place where a sin was committed, and leaving that place for another, the correct action, or is it obligatory to make the place prosperous with obedience to Allah?

Allah Almighty did not legislate forbidding sitting in a place where a sin occurred merely because it occurred. Rather, He legislated repentance, seeking forgiveness, abandoning bad companions, and leaving the place that facilitates the repetition of sin. The story of the man who killed a hundred souls indicates the command to move to associate with the righteous and distance oneself from the village of evil, not merely to leave the place of sin. Your repentance and seeking forgiveness are sufficient, and if you obey Allah in the place where you disobeyed Him, it would be better; because the spot testifies to what was done upon it, whether good or evil.