In regard to shorter URLs:
The goal is to find a proper balance for your needs. You want to group things into sub-groups based on proper hierarchy, however you also don't want to go too deep if you don't have enough pages/individual listings deep down the chain.
So the Moz post you point to refers to that - at a certain point, having too many layers can be a problem. However there is one one single correct answer.
The most important thing to be aware of and consider is your own research and evaluation process for your situation in your market.
However, as far as what you found most people search for, be aware that with location based search, many people don't actually type in a location when they are doing a search. Except Google DOES factor in the location when deciding what to present in results. So the location matters even though people don't always include it themselves.
The issue is not to become completely lost in making a decision either though - consider all the factors, make a business decision to move forward with what you come up with, and be consistent in applying that plan across the board.
What I mean in regard to URLs and Breadcrumbs:
If the URL is www.askme.com/dehli/saket/pizza/pizza-hut/ the breadcrumb should be:
Home > Dehli > Saket > Pizza > Pizza Hut
If the URL is www.askme.com/pizza-huts/saket-delhi/ the breadcrumb should be
Home > Pizza Hut > Saket-Delhi