Why does and how can I correct that find my iPhone shows the device I have in my hand as many miles away from where it actually is?

is the device in your hand a WiFi only iPad? If so, it gets its location information from the WiFi networks it connects to. Accuracy is problematic.

If you have the WiFi-only iPad your location is determined by the location of nearby WiFi routers. This is done by using a Apple location database which contains the MAC addresses of routers and their physical location. A MAC address is a unique number which is built-in to all network devices when manufactured. The Apple database is built and updated by Apple GPS-enabled devices (primarily iPhones) actually seeing your router and then adding/updating the router's location in the database.

Bottom line: Your Router or other nearby routers are not accurately located in the Apple location database.