Does location affect the likelihood of encountering different Pokemon?

Yes.
There are certain Pokemon that are hypothesized to be location locked by continents.
Tauros: North America
Mr. Mime: Western Europe
Kangaskhan: Australia / New Zealand
Farfetch'd: Asia
There are other Pokemon that will spawn more frequently in parks/certain areas. For example, in Seattle Scyther is found in the Arboretum, and Lickitungs can be found in Discovery Park. Try to search Facebook/Reddit for Pokemon Go groups in your city. You will probably be able to find some documentation of where Pokemon show up in parks and other public places.
There is another hypothesis that more rare Pokemon will show up at higher density spots of cell reception, which is why you might hear a story about everyone on your college campus quad catching a Dragonite.
Here is a great video showing people stampeding at night trying to catch a wild Vaporeon (Eevees may be common, but Vaporeons are very rare to find).
The best advice I have is to check out national parks, monuments, and other popular public places near where you live. You might only get Weedles and Pidgeys at your house. But there is a good chance something rare will spawn in a nearby park. And because there will be more people playing, you will have a higher chance of finding rare Pokemon like Snorlax or Dragonite.

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