Could you check the following possible configuration available for each country:

Sales->Configuration->Address Book->Localization->Countries

Open your country and edit

%(street)s
%(street2)s
%(city)s %(state_code)s %(zip)s
%(country_name)s

to

%(street)s
%(street2)s
%(zip)s %(state_code)s %(city)s
%(country_name)s

Will this help you?

PS. In reports use <display_address(o.partner_id)> when printing the address.

That needs to be changed in the XML view declaration of the form. For a quick change you can enable developer mode, go to the form and click "Edit FormView", then swap the city and zip tags.

A much better solution is to create a module and inherit that view, then replace the city field with zip and the zip field with city.