How important is school choice regarding location

It's definitely easier to conduct a job search in your backyard than across country. Coming out of HBS, there was a large contingent of my class that wanted to come out to the Bay and for standard jobs with standard companies in the area (think Gap, Well Fargo, etc.), it wasn't an issue but to find opportunities with smaller companies was. Within the last few years more and more people from my class have moved to the Bay, because they weren't able to conduct a proper job search when we first graduated.

I say all that to say, that it should definitely be a consideration. Not your only consideration, but you should probably apply to at least one bay-area school and then if you decide to go elsewhere, be prepared to make the investment to make the cross-country job search. Being from the area already will help a bit, but it can definitely be tougher to do.