Is ETOPS satisfied solely by range circles?
No, ETOPS is not satisfied solely by range circles, but (among other things) by the "time needed to fly to that airport".

See the requirements of 14 CFR 121.633 (emphasis mine):


  (a) For ETOPS up to and including 180 minutes, no person may list an airport as an ETOPS Alternate Airport in a dispatch or flight release if the time needed to fly to that airport (at the approved one-engine inoperative cruise speed under standard conditions in still air) would exceed the approved time for the airplane's most limiting ETOPS Significant System (including the airplane's most limiting fire suppression system time for those cargo and baggage compartments required by regulation to have fire-suppression systems) minus 15 minutes.


Paragraph (b), for ETOPS beyond 180 minutes, gives the same "time needed" requirement.

So, if a scenario existed as the question describes where "there is terrain between the route and the airport which makes [the ETOPS alternate] absolutely unreachable", then that flight could not reach that alternate in the required time (since the alternate is not reachable), and the flight could not be dispatched listing that alternate.