My knees hurt from biking; is it my seat height or my bicycle wheel measurement?

To start with, your bike is probably too small for you. Knee pain has several causes, and bike fit is one of them. If you saddle is too low, you will be very likely to hurt your knees, also pedaling in too high a gear can injure you. You say that you live in a hilly area, cruiser bikes are not very good for riding in that sort of terrain, unless yours has multiple gears, but even if it does, its weight works against you. The type of bike you bought, and its size are both working against you