Short Answer: It depends on which hermeneutic you follow.
To my knowledge there are three major hermeneutical approaches to this question:
Approach #1: The literal hermeneutic
In this approach, the text means precisely what it says; Bethel refers to Bethel, Judah to Judah, Ephraim to Ephraim. If we read a prophecy anticipating the downfall of Gilgal it is because Gilgal was going to fall, it was predicted in advance, and the writer wanted to show that to his readers (for whatever reason.)
Location names could be very important in this approach for helping us determine the intended audience -- but they don't have to be. Many who follow this approach, for example, consider the Bible to be the "Word of God" to all His people across all ages, so the "original audience" would not be confined to the "Bethels" and "Gilgals" mentioned in the text.
Approach #2: The contextual hermeneutic
In this approach, the text represents an ancient author's attempt to communicate with his ancient audience. The author wrote to particular people, during a particular time, in a particular language that was common to both himself and his audience -- including vocabulary and points of reference. The author's intention was to communicate as effectively as possible. At times that meant employing metaphors. One of my favorite examples of this is the prophecy
Behold, I am going to send you Elijah the prophet before the coming of the great and terrible day of the Lord. -Malachi 4:5, NASB
The idea is not that Elijah was literally going to show up on the scene; to understand the prophecy we need to ask who Elijah was to the original audience. Elijah represented the lone voice of righteousness amidst national apostasy, a herald of repentance and spiritual transformation (or something else, depending on your theology). The prophecy was intended to call to mind the literal person as a point of reference in order to communicate something. Someone reminiscent of Elijah would come crying out for the repentance of His people.
Location names are important in this approach because every place mentioned is a point of reference which the original audience would have associated with some important idea(s). (Dick Harfield's answer represents this approach.) However, they may or may not be helpful in determining the original audience; they do not necessarily directly point to the original audience, but they may give us clues about the characteristics of the audience. Examples (theologically biased, but they'll work for my purposes here):
Moses wrote to the Israelites in the wilderness about the destruction of Sodom and Gomorrah because it was reminiscent of what they had just seen happen with Egypt. Moses wants to associate extreme wickedness with Egypt so the audience is clear on how to think about the place they just left. He tells of Lot's wife being judged for looking back because he doesn't want them to look back.
The author of Jonah writes to his Hebrew audience about Jonah's cold heart toward the Ninevites because he wants them to repent of their cold hearts towards the wicked and instead serve as a witness to them in hopes of their repentance.
The author of Esther writes to his Hebrew audience about how God reversed the fortunes of His people when doom seemed certain because he wants his kinsmen to rest assured that no matter how bad things get, God will bring them victory in the end.
In all of these examples the specific locations (or people) mentioned are important as points of reference, but they only imply things about the original audience; they don't directly name the audience.
Approach #3: The spiritual hermeneutic
In this approach, the Bible has far deeper meaning than the rudimentary words on the page. You have to be spiritual to see these deeper truths -- and sometimes even enlightened. Possible examples:
When you read of the Israelites leaving Egypt, it is really talking about the Christian's "exodus" from his old life. The crossing of the Red Sea was the baptism of the Christian. The wandering in the wilderness was the time of trials that we have on this earth. The crossing of the Jordan is our entry into the next life, and the Promised Land is heaven. (See 1 Cor. 10).
The story of Sarah and Hagar is really a story of two covenants -- one fleshly and one spiritual, and the superiority of Jesus' way over the Jewish way. (Gal. 4)
The Gospel is preached in the first genealogy in Genesis (from Adam to Noah); "Adam" means "Man", "Seth" means "Appointed", and so forth. When you read them all in order you get the following: "Adam appointed mortal sorrow; the Blessed God shall come down teaching. His death shall bring the despairing rest."
The actual names of locations or people are not really important for building an historical context for the writing, because (A) in this approach we don't really care about the historical context, (B) it is not really even important that the names & places listed were real, and (C) the places or names listed were not intended to tell us about the original audience in the first place.
Example Applications: Zechariah 10
As requested by the OP, here are some examples of how each approach might handle some relevant portions of Zechariah 10. (Note that these examples are not perfect, but they will help illustrate the ideas.) Here are the verses, for reference:
I will strengthen the house of Judah,
And I will save the house of Joseph,
And I will bring them back -v. 6a
I will bring them back from the land of Egypt
And gather them from Assyria;
And I will bring them into the land of Gilead and Lebanon -v. 10a
And He will strike the waves in the sea,
So that all the depths of the Nile will dry up;
And the pride of Assyria will be brought down
And the scepter of Egypt will depart. -v. 11b
6a) This means God was promising to make the tribe of Judah strong and save the descendants of Joseph, and that He was planning to bring them back.
10a) This could be taken to refer to (A) Ephraim, (B) Judah, Joseph, and Ephraim, or (C) all Israel (with these tribes used as a synecdoche for the whole). It means God will bring them back from Egypt and Assyria and bring them into the land of Gilead and Lebanon.
11b) This means God will part the waters of the Nile like He did during the Exodus, that Assyria would be ashamed, and that Egypt would cease to rule.
What we learn about the audience: The audience could be taken as exiled Judah, Joseph, and Ephraim, if not all Israel. Or, it could be that we are the audience and God just wanted us to know that He is going to bring His people (the Israelites) back into the Primised Land (Palestine.)
6a) Judah and Joseph were known to the readers as the people of God. They had been exiled for their sin and they longed to see restoration. Zechariah is communicating to the readers that God's people were going to be gathered together into one unified nation again.
10a) Egypt and Assyria were known to the readers as the kingdoms of the world (vs. the kingdom of God.) Gilead and Lebanon were known to the readers as the Promised Land from which they were exiled for their sin. Here Zechariah is predicting a gathering of God's people out from the oppression of the world and into the blessed Promised Land.
11b) The drying up of the Nile would recall for the readers the parting of the Red Sea and the Exodus. Zechariah is describing this salvation as a 2nd Exodus in which they would be set free from their oppressors as their oppressors were simultaneously humiliated and stripped of power.
What we learn about the audience: This was likely written to the people of God who were in exile and were desperate for restoration. They were in need of hope and reassurance of God's promises.
6a) Judah, Joseph, and Ephraim could be taken as the Church. God's wants to strengthen us and save us from our hardships and bring us back into His blessings. (I have also heard Mormons say "Joseph" in places like this refers to "Joseph Smith" -- something you have to be alive 3,000 years later to fully understand.)
10a) This could either be taken as a prophecy about Jesus rapturing His Church at the end of time, or it could be taken more devotionally as a promise from God to the modern reader that He is going to take them out of their difficult situation.
11b) The parting of the Nile represents baptism. God is saying there will be baptisms. The pride of Assyria being brought down is a prediction of humility for God's people and / or humiliation for those who oppose God's people. The scepter of Egypt departing means God is going to give the Church victory over the nations.
What we learn about the audience: Irrelevant.