Hi Paul,
To add to what Priya said in answer to your first question, Google shows dots on the map for each of the 20 locations in the results for that page of the local finder. Any SAB businesses don't get a dot. In this case, there are only 7 dots showing, meaning 13 of the results are SABs. I expect it's just luck of the draw that the top 3 are all SABs.
Google counts proximity for SABs based on where their hidden address is. Even if you say you serve Irvine, CA (for example) and your service area appears to be centered in the middle of the city, your listing will actually be most likely to appear for users near your hidden location.
I work most often with wedding photographers, so that's the industry I keep the closest eye on. I haven't done a real data driven deep dive like Dan from Local SEO Guide (yet) but I still take a look at a few thousand businesses once a year just to see what patterns I can spot. As of last August at least, my belief is that marking your business as an SAB doesn't help or hinder you. I'm reasonably convinced Google treats it all the same, though I'd be interested to hear if anyone else has experienced otherwise. Last September there were some pretty big shakeups, so it's entirely possible that being an SAB can influence your ability to rank somehow now. Priya, if you've seen some cases that make you think being an SAB is a factor, I'd love to hear about them if you don't mind sharing.
Even if being an SAB is a small ranking factor, you should still select the setting that's appropriate for your business. The only time this affects anything you can actual control, is if you have multiple addresses you can select. For example, if you have a business partner, you would want to choose the residence closest to your potential customers. Even if it's hidden, it would help you show. (As a side-note: don't use an employees house, a virtual office, etc. to try and cheat the system, Google does take action on that if they find out).
If you work from a home office but meet clients offsite, you need to be an SAB. Showing your address is only for business that are staffed and able to receive visitors during your stated business hours. You can look at
Google's Business Guidelines for more information.