Let me answer the questions in the reverse order asked. (I agree that the seven churches of Rev 1, 2, 3 and Patmos are literal.)
1. Non-Literal Locations
Very fewMany of the locations mentioned in Revelation 4-22 are not literal but symbolic. Here are some examples:
- Rev 11:8 - Sodom and Egypt are specifically called "spiritually" or "figuratively". Thus, they are not literal.
- Rev 14:1 - Mt. Zion with a Lamb standing on it and 144,000 virgins accompanied by the sound of many waters and the Father's name written on their foreheads. This is clearly symbolic
- Rev 16:16 - three frogs assemble the kings in a places called "Harmageddon" = Mt. Megiddo. No such mountain exists and so cannot be literal.
- Rev 17:5 - Babylon is the name of the great prostitute. Again, highly symbolic.
2. Babylon and Rome
It is true that "Babylon" in 1 Peter 5:13 is the well-known euphemism for Rome.
- 1 Peter 5:13 - She who is in Babylon [ie, Rome], chosen together with you, sends you greetings, and so does my son, Mark.
3. Babylon Rebuilt?
It is also recorded that Babylon would never be inhabited again after its destruction:
- Jer 50:39 - So the desert creatures and hyenas will live there [Babylon] and ostriches will dwell there. It [Babylon] will never again be inhabited or lived in from generation to generation.
Saddam Hussein and others have had various plans to rebuild ancient Babylon but thus far, all such plans have never been implemented and the prophecy remains, so far, in-tact.