Cool!
We truly do feel that these types of agreements are the kind that allow a real trust to build amongst neighbors, instead of strict NAPs that only build mistrust until the expiration of the agreement.
Your comments are correct, ok, that you guys can reserve a spot anywhere you want, but have no obligation to do so. So if you want to reserve a site on the other side of our borders...well you can do that, but it doesn't make sense so we wouldn't settle a city on the other side of the world.
In regards to declaring war, well one can't consider a DOW as something that respects the reserved right to settle a city...so in our consideration it would not be respectful of the agreement, at least during those reserved turns. But understand that this is not a NAP, so you should take proper precautions to defend your cities as best as you see fit.
So, whenever you find a good time, let us know where you plan to settle a city, showing us with a screenshot or a description of the reserved area.