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Okay, so number 18 is one of those "which of the following must be true" questions, and I was able to get the right answer (E) by eliminating the other ones, but I can't figure out how I was supposed to identify it as being correct by any method other than elimination/trial and error.

The reason I'm asking is that after I found E to be the correct answer, I added that rule to my diagram and it helped in answering the questions that followed. Had they not asked that question though, I wouldn't have added it as a rule of the game, and I would've had much more trouble with the other questions.

I guess I'm basically asking how would you diagram this game? (assuming your diagram would allow you to infer that N and W must be 2 cities apart)

Diagramming isn't the issue here. It's more about analyzing the effect of the last two rules. There are six cities: if T and M are two cities apart, and if V and L are two cities apart, then the other two cities--N and W--must also be two cities apart. Getting this deduction is also helpful on several of the questions that come after 18.

Maybe it's just me, but I actually feel like the LSAT writers often order the questions to help guide you through the game. By that I mean, for this example, yes the rule found in 18 helped a lot with the rest of the game, but that's exactly why it was asked second in the set. Alternatively, early questions are phrased so as to require you to make the comparably necessary inferences to solve them, leaving you with that extra rule for later problems (indirectly achieving the same result). Even in much maligned games like "Dinosaurs" from 57, the unstated but key rule is already hinted at in the first question. So while it's definitely better/helpful to be able to see these kinds of relationships early on without being forced to do so, and while it sucks to have to occasionally hypotest/solve by elimination, I don't think this is something worth worrying too much about.