I purchased the .99 app GPS Diagnostic, which shows constant GPS signal status for each available satellite. Since then, I have seen quite clearly how sat reception hovered around the 50% range for all sats, which gave me around a 200 foot accuracy radius or worse. At this level of accuracy, it is no wonder it could never pinpoint what road I was actually on, which prompted Maps to keep trying to reroute me.
I placed a call to Apple support, this morning, to discuss this issue and to see if they had any new information/solutions. While going through the setting we discovered together that iOS 10.2 was out, so the tech suggested that after the call I do the update and see if that solved the issue. It did not.
However I have made one discovery, which may be of some use to a few of you. In my case I have been able to confirm that this issue largely goes away when I turn off the bluetooth radio transmitter I purchased a few weeks ago, so I could listen to music through my car stereo. When I turn it off, the sat reception climbs up into the green (between 75% and 100%. Not instantly, but obviously, and over about a 10-20 second period. If I turn the bluetooth device back on again, reception immediately dips down again. I'm not 100% certain, because reception strength is always moving up and down to some degree, and will occasionally dip even when I do nothing. But at lunch today I drove a few miles, navigating to a restaurant using Apple Maps, after I had updated my iPhone 7 to iOS 10.2, then doing a hard reset. It couldn't find my exact location most of the whole way there, and sat reception was low. On the way back, I had the bluetooth device turned off, and it navigated me back to my office with not a single hitch or hesitation.
This is not a definitive test (only a couple of miles and only 1 test). And this is clearly not a solution. But for me it could prove to be a workaround -- to be sure, one that is unsatisfying, as it means turning off news podcasts or music when I want to navigate, but at least I CAN navigate, now.
I'd be curious to find out if this proves to be true for anyone else.