As far as I know, you can't use the search box in Photos to retrieve pictures by location. I'm not sure about earlier versions, but the thing is, it sounds hard. Would you use latitude and longitude? Is Manhattan the same as New York? State or city? How big a radius? Perhaps that's why location is not a search condition in a Smart Album.
I have certainly wanted to search by location, and for that I've used the map in the Places View. If I want pictures from Bayou Teche in Louisiana, for example, I can scoot the map over there and zoom in, and I find there are pictures from Breaux Bridge, New Iberia, St Martinville, and other places on the Bayou. But could the Teche be a location? I'm just wondering how it would work, since location might have multiple meanings.
You use the phrase "location keyword," and that's a great idea-- I add a keyword to pictures to identify general location. For travel, I may include the general location in the title, as well. So I can search for Coventry, because that's in the keyword list of some Photos. I can go to Louisiana, zoom so that all the Bayou Teche pictures are together, select them all, and add the keyword BayouTeche. Then I can use the search box or a Smart Album to find all the pictures from that location.