With the advancement of society and the impact of various factors such as climate change, surface conditions, and human activities, there has been a significant increase in the frequency of extreme rainfall events, leading to substantial losses from flood disasters. The presence of numerous small and medium-sized water conservancy projects in the basin plays a crucial role in influencing runoff production and rainwater confluence. However, due to the lack of extensive historical hydrological data for simulation purposes, it is challenging to accurately predict floods in the basin. Therefore, there is a growing emphasis on flood simulation and forecasting that takes into account the influence of upstream water projects. Moushan Reservoir basin is located in a hilly area of an arid and semi-arid region in the north of China. Flooding has the characteristics of sudden strong, short confluence time, steep rise, and steep fall, especially floods caused by extreme weather events, which have a high frequency and a wide range of hazards, and has become one of the most threatening natural disasters to human life and property safety. There are many small and medium-sized reservoirs in this basin, which have a significant influence on the accuracy of flood prediction. Therefore, taking Moushan Reservoir as an example, this paper puts forward a flash flood simulation method for reservoirs in hilly areas, considering upstream reservoirs, which can better solve the problem of flood simulation accuracy. Using the virtual aggregation method, the 3 medium-sized reservoirs and 93 small upstream reservoirs are summarized into 7 aggregated reservoirs. Then, we construct the hydrological model combining two method sets with different runoff generation and confluence mechanisms. Finally, after model calibration and verification, the results of different methods are analyzed in terms of peak discharge error, runoff depth error, difference in peak time, and certainty coefficient. The results indicate that the flooding processes simulated by the proposed model are in line with the observed ones. The errors of flood peak and runoff depth are in the ranges of 2.3% to 15% and 0.1% to 19.6%, respectively, meeting the requirements of Class B accuracy of the “Water Forecast Code”. Method set 1 demonstrates a better simulation of floods with an average flood peak error of 5.63%. All these findings illustrate that the developed model, utilizing aggregate reservoirs and dynamic parameters to reflect regulation and storage functions, can effectively capture the impact of small water conservancy projects on confluence. This approach addresses challenges in simulating floods caused by small and medium-sized reservoirs, facilitating basin-wide flood prediction.