Related to that recent post you made, it took orcs 2 weeks to travel from one end of the Barrens to the other in one of the official Warcraft books. I like to think that Azeroth, including the cities and towns, are much much bigger than portrayed in-game.
Oh yeah, for sure. With the distance between Northrend and Tirisfal in game, Arthas' soldiers could have probably gotten home after he burned their ships just by building rafts out of the wreckage. So you have to suspend a little disbelief and just imagine it's bigger than it looks. The distance and scope of the planet is probably just a little smaller than earth, but obviously something like that in an MMO is completely impossible even at this point (and moreso in 2004). Crossing Moonglade would be like crossing the entirety of Skyrim and nobody would get anything done ever. Doesn't help that RPers (myself included) tend to handwave a lot of travel because if your plot starts in Stormwind and ends in Valiance Keep, you really don't want your character to be locked down on a boat for three real-world months. It might be fun to explore the story of a long trip every once in a while, but not every time-- sometimes you just want your story to progress.
But yeah I think there are a lot of settlements missing (not including the ones we know that are missing *coughKulTirascough*), so making up a random background town for your character to have come from is a pretty good idea.
(I remember being used to playing games where "towns" consisted of a few NPC houses, an inn for saving, a market, and maybe a big temple/castle/whatever where you establish your next plot point. So when I first encountered Warcraft's cities I was overwhelmed by how big and immersive they felt-- they had streets! And quarters! And dozens of shops! It was magical. But... they would still count as very large villages for the time it takes to /walk across them, haha.)