First, let me say that I wouldn't like to see a "namespace flood". For lists, just say "List of ...". We should have a "List of lists", though, as an "almanach main directory".
These lists all have "real" content, so they should stay in the article namespace. The WikiProject pages might go to the wikipedia: namespace, as they are of an organizational type.
The idea behing the log: namespace was to have logs that cannot be edited, even by sysops, to keep track of their actions. Of course, with the later addition of direct SQL access, the whole concept became flawed.
For the naming conventions of cities, IMHO the important thing is that the different articles can be told apart ("Paris, Texas"). That Texas is in the US can be mentioned within the article. The search function will find it anyway, and as the "All articles" page is disabled, noone can browse through the articles by name anyway.
Magnus