I was browsing Etsy the other day and when I find a shop that I like I almost always look to see where it is located. I am always surprised when people use odd locations in their "locations" option. Things like, "where harry potter lives, somewhere over the rainbow, Wrigley field, etc." While it's fun to read these things it does nothing to help you when someone is shopping by location.
The location feature on Etsy allows people to shop local or in certain areas of their choice. But if you put in a cute location, the etsy database is not going to list your shop when your potential customer does a search. I would also recommend not stuffing your location. I use my city and state. It's important to use city, state, country since someone living in Bavaria may not know where Cleveland is. Then there is the confusion of which Cleveland you live in -- Cleveland, Ohio or Cleveland, Tennessee? Or, any of the other locations.
I also like to know where you are so that I have an idea of how long it may take for my purchase to arrive. Plus, I know whether or not the item can be tracked through the postal system. It also helps when I order. If I'm shopping in the late afternoon and find something I want from Germany, then I know the shop keeper probably will not see my order until the next day. Knowing that keeps me from being anxious if I don't hear for the seller for a day.
What is your location?