Where does stress build up and eventually release within a fault?

Across the surface of the fault.

Explanation:

In the event of a fault, the rocks do not disintegrate immediately. Instead friction generated between the surfaces of a fault hold the rocks together.

The forces separating the rocks builds and accumulates stress over time on the surfaces of the fault until they let go.

The sudden slip of the rocks is what causes the shaking of the earths surface that is refereed to as earthquake.