Metropolis is based on Manhattan. Gotham is based on Jersey City and Newark, or the more run down boroughs of NYC. Not being an expert on NYC, I don't know if that's Queens, Bronx, or Brooklyn.
So... every Superhero in DC Comics resides on the east-cost of the united states?
Hal Jordan lives in Coast City, which is in California. Ollie Queen usually lives in Star city which is in Washington state and has also lived in Seattle.
I've always known that Metropolis and Gotham were North Eastern, coastal cities, and that they existed apart from NY. When I first found out about this Atlas, it made perfect sense to me that Metropolis would be in Delaware and Gotham in NJ. Some people say that the Atlas isn't canon, but the NJ connection has been made in modern continuity, as it does state "Gotham, NJ" on Tim Drake's birth certificate. I haven't actually seen that, but I've heard it from several people and no one's refuted it.
The more confusing thing, for me, is not Gotham and Metropolis, but Keystone and Central city. You can google it, go to three sites, and get three different answers. I know they're in the midwest... but are we talking about Illinois, Kansas, Missouri, Ohio?
In search of Claire...or Libby Hoeler :D
"What is illness to the body of a knight-errant? What matter wounds? For each time he falls, he shall rise again, and woe to the wicked.
Let Delaware have Metropolis, so at least in some alternate world it's an interesting place.