Yes she did - and Betty didn't correct her.

I thought they had used that space to put in the new staircase connecting the two floors internally?

He had a non-compete clause in his contract. They'd have to release him from the contract - and presumably buy out his partnership shares which they couldn't afford to do. They also did NOT want him working for a competitor.

And if she keeps carrying on the way she does, she won't.

At least Oxford a fair sight bigger than Cabot Cove, lol. Why anyone would want to live within a country mile of Jessica Fletcher is beyond me. Cabot Cove must have had a higher per capita murder rate than Chicago. Small wonder Jessica hit the road after a couple of seasons.