Could they walk wherever they wanted to go in Lanford?

I wanna say they still drove quite a bit. I remember some episode where Dan decided not to take any mode of transportation and walk it to work, but eventually gave up and decided it wasn't worth it.

Don't forget, they also owned a motorcycle plus shop. Dan basically worked on vehicles for a living while employed with the city of Lanford. So it's probably not as small as you're thinking, at least not in the terms where it could be compared to something like Manhattan, New York.

I live in a relatively small city with local businesses down the street around the corner from where I reside, but only walked on one occasion. I take my car to work and for running errands 99.9% of the time.

The show was not overly consistent in laying out Lanford. Just watched a last season (yuck) episode and that implies there were only two social spots which would mean smallish town. One would have to be the Lobo and the other would be The Lanford Inn which probably had a barroom. To answer the question I think that Lanford is small enough to walk most places easily even in the winter. In the interior Northeast 10,000 people would get a municipality labeled a city and that is where Lanford would most likely fall based on Dan getting the "city" garage job. Lanford is probably close enough to a few other smaller towns to justify having a mall with presumably a regional anchor in Rodbell's.