dont' rotate the dem, rotate the grid
Details on what happens whether you use fixed width/length etc are covered in the help topic.
Create Fishnet (Data Management)—ArcGIS Pro | Documentation
from Pro's help but the tool is similar in arcmap.
If you run the tool, you will find, that the progression of the polygons is left to right (west to east) for a single row.
You will have to experiment to get things split as you want.
as for the section being missed, check your input parameters to the tool and run Check Geometry on your polygons to ensure that they are clean
... sort of retired...