Re: the secluded master
Technology and craft has advanced due to unified effort. Knowledge passed between masters is the cause for advancement, not the trial and error of hermit smiths, philosophers, and technologists. I do not believe however that those in populous areas should strictly be the keepers of high technology. Technology should be a function of unified effort and resources, I.E. There should be resources that are too precious or dangerous to spare traveling to the boondocks to deliver, though if there are those willing to travel to bring them back that should definitively be possible. Structures that benefit from populous environments should be the limiter: labor(build), resources, labor(repair), etc.
Re: item decay in mordor
Item decay increased in mordor is a rude mechanic. It serves its purpose of increasing the demand for civilization's goods in the wild, but nothing more. It does not engender realism or, and thus for many people, enjoyment.
re: structure limitations
The idea of a structure only being buildable within the limits of a civilized zone is also gimmicky at best, similar to the idea of increased decay in the wilderness. Resources human, material, and technological, should be the limiter. Make item decay standard in such a way that a return to civilization now and again is necessary, exciting, and in a way scary or loathsome for the woodsman.
re:less weight for hearthfires, more for idols
Less weight for hearthfires and more for village idols is a great idea. Ideally the weight of a person in an area will be felt in his actions and not simply his residency. Brosephines idea is great too: the more active the populace, the less present the wildlife, but again it's a rude mechanic which replaces human action.
Lawspeaker of Buried Deeply.