The low countries were settled because, at first, they were not very low and were excellent farmland. They could be drained rather easily with shallow ditches. As farming continued, and drainage, there was soil subsidence, which created a need for more drainage, but now also sluices and simple dams: like a swinging gate across the mouth of a river that would swing shut as the tide rose, to prevent flooding upstream. By the mid 13th c. much of the region had various encircling dams, drains, sluices, and gates, and there was yet more subsidence. One estimate has been that the land has dropped , in places, more than five meters. So, the answer to the second part of your question is: they didn't relocate because they were able to solve a series of smaller flooding problems over time, instead of having to build immediately a huge flood control system. This has continued into the present day: you can see how extensive the present flood control efforts have become with the Delta Works

This effort to control the "waterwolf" should not be confused however with the huge Zuiderzee project of the 20th c., a systematic damming, draining, and reclaiming of land from the North Sea. While Wikipedia is not a great source, here it does have a very useful map with dates, showing the complex timeline, areas drained, etc.

TeBrake, Taming the Waterwolf: Hydraulic Engineering and Water Management in the Netherlands During the Middle Ages Technology and Culture Vol 43 No. 3. ( 2002)