In that case different algorithms for distance could be used instead of just geographical location.
Yes. And the main point would be that one npub has to commit for a locality. Moving could be possible, but would have opportunity costs attached: you loose access to the old locality. And moving too often could be considered spammy. This could be a metric for a public reach equilibrium. An elastic system. Certainly always overridable by the clients (e.g. by fellowship).