Just to clarify how this all works, your Local Spotlight ad allows you to select up to 20 locations. I just checked out your account, and it looks like you have exactly 20 locations already. Just to clarify though, by "location" we mean zip, city, or neighborhood. But if you select 94103 (a zip in San Francisco) and then also the city of San Francisco, that's considered 2 locations. By the way, it makes sense to do this, since the locations you select will be used for targeting users who search in that particular area. These locations are unrelated to where the user actually is (from a geographical standpoint). So, if a user is in Honolulu, but runs a search in 94103, and 94103 is one of your locations, your ad is likely to show up (regardless of whether or not Honolulu is a location you've selected).
In general, when picking your 20 locations, I would suggest choosing a city or two from the areas you serve. Then, I would also select the same corresponding zip codes. Fewer people search by zip code on Trulia, but those that do are likely more certain of what they want, so the leads you'll get there are likely more valuable.
I hope this helps, but please don't hesitate to ask further questions. By the way, I was in Kauai on vacation just a couple of months ago and drove through Kapaa. What a lovely area you serve!