Just my 2 cents, but I think discussing the location and the appeal of the location is fine in most cases but not okay in others.
Talking about location in a good way:
I would really like to attend X SOM because I am extremely passionate about rural medicine and I believe the environment present at X SOM and the connection the school and hospital has with the community surrounding the school would provide me with a great opportunity to pursue my interest in rural medicine.
Alternatively:
I would love to attend Z SOM because it is located in Washington, DC and I am passionate about healthcare policy. Blah blah blah
Talking about location in a bad way:
I think I would be a great fit for Y SOM because it's located in Manhattan and I've always loved the culture and nightlife of Manhattan. It has always been a dream of mine to attend school there.
So, I guess what I'm trying to say is that you can talk about wanting to attend the school for it's location but just make sure that the fact that it's close to home isn't the only appeal for the location. Discuss the community surrounding the school and how you think being educated in that environment could potentially positively influence your medical education (through service, research opportunities, etc.). Hope that helps, good luck! 🙂