No answers, but I found the answer to this offline. Thought I would note it here for those of you who are interested.
1. In terms of Amazon cloud hosting they have datacentres in specific locations so there is (probably) no worry about losing any gains from localised hosting. Assuming they have a datacentre in the region you need.
2. Related is something I have just learned about is Amazon Cloud Front, a content distribution network in which your content is delivered to a location near to where it is requested from. The main advantage is low latency high speed content delivery but there may be SEO localisation implications
