1. You can just dig it up. I think it's where the torches are. There is no actual totem.
nope. the grave is just next to the crying ork and yes, you need perception.
You couldn't be more wrong.
If you talk to him and pass the RPS test for him to tell where his brother's grave is, he will go exactly to the spot where he buried his brother. If you already killed him, it's north of where he was sobbing, near some rocks.
If you didn't kill him, then what you need to do is go behind him and
equip the shovel (YES, this time there is nothing to click, so you have to trigger using the shovel by equipping it). When you equip the shovel the character will dig the corpse of his brother and he will start a fight.
If you killed him, just go to the right spot and equip the shovel. But by now what you find inside will be useless (a unique orc armor and a unique orc helmet).
Edit: Perception doesn't help to find this grave, but helps find all other 3 that are in this area (all others are near small totems).