I'm not sure that the blue circles take into account hidden resources; I seem to recall that being disproven, but I'm not an authority on the game's XML code.
The blue circles are worth considering. They are the AI's recommended city sites; in other words, if an AI civ was to plunk down a city in that vicinity, the blue circle is where it would go. You should at least have a look and figure out why the AI is recommending a location over a nearby one you had in mind. There may be an extra resource that site snags, or a fresh water bonus (the AI values this highly, perhaps a little too much so), or coastal access, etc.
However, to my knowledge the game's AI does not consider things like city specialization or the location of other cities nearby. It just considers the best spot for that specific city, not for your empire overall.