I assumed it would spread outside of Hawkins. Kind of hard for it not to with the Russia connections and some of them moving out of Hawkins.
Hopper has to come back. I would not be surprised if 11 dies in the last season trying to get her powers back, even though I still think she is going to decide not to get them back.
Just finished last night. What a fantastic season. Definitely my favorite of the three. The last episode might go down as one of my all time favorite TV episodes of all time.