The hills are considered haunted due to many reports of spectres and ghosts over the years. The hills are also home to a number of extremely old burial grounds and tombs, and there is an unknown system of protective wards and curses on the region. The townspeople and most explorers avoid it, viewing it as more hassle than it's worth, and the age of the tombs make it likely that raiders have already plundered most of the available treasure.
In recent years, the haunting seems to have spread, with ethereal undead being frequently seen on the highway. This is why the Haunted Highway acquired its name.
There are three quests available in the area. The main quest line involves breaking the curse on the hills, and there are many hints scattered about the tombs which reveal the history of the hills and the reasons behind its protections and wards. There is are also quite a few treasure items, making it worthwhile to explore every tomb.
The other two quests involve the Winter Wolf, which resides in a cave in the hills. It's difficult to describe the location, so your best option is to just wander around and look for it. When you're in the place, you'll see this:
A dark space in the underbrush looks like it might be a cave entrance.
The quest givers for the Winter Wolf quests are in Indira, with Pegad giving one, and Beliana giving the other.