yea, good idea. We were planning on including the postal code in the post flow so once we have that people could browse based on proximity.
Currently you have people selecting a region and THEN selecting what they want. It would be better to have people select what they want and THEN select how important the proximity is.
That solves (i) The arbitrary city/region issue and (ii) Lets you advertise on the home page the scope of what people can shop for, rather than advertising all the cities in a country.