(The kobold is quite good at figuring out words from context, yes, and only getting better as she figures out the details of Kiri's personal body language.)

She doesn't have to be right on top of the location she's trying to observe, but she has to be pretty close, and more importantly she needs to be out of Kiri's mindreading range while she does it - she's not sure that'd give Kiri her kind of magic, but she's nervous about what would happen if it did.