My girlfriend Miiko lives in 2-chome too.
The typhoon flooded both 1-chome and 2-chome.
I got this peach from Tanaka of 3-chome.
A street you can see with your eye isn't soooo big you can't see it (like a town would be), but it's still pretty big because it has a street. This section of the town is the district of a town, or a city block (though specifically one of an irregular size).
The readings are the ones you learned with the kanji, so use those and you'll be A-Okay.