You don't have to sign up clients in person. You can do meetings online via Skype or Zoom. You can target whomever you like, just remember to go after clients that are already advertising as they are your best prospects.
The bigger the city, the more you can work with. What you can do is be very mindful of the type of businesses you work with.
For example: you might not want to work with 5 pizza clients, but instead diversify by working with a massage therapist, pizza restaurant, high-end restaurant, fast food place, a gift shop, etc. Just being mindful that with different types of businesses, you won't "step on anyone's toes."
What can happen, is if you work with too many businesses in a small area, it can lessen your results. If this happens and you have too many clients, which is a good thing, then you can now use a directory to house those multiple clients. That is the purpose of it- to be able to cater to multiple clients in a set area.