Yes, the Iodine will only be absorbed as long as the body requires it, after it is saturated it will no longer take it in, regular consumption of Iodine rich foods to keep it plentiful in your system.
No, it does not matter where you apply it. When I started this four years ago I put it directly on my thyroid for a few days then switched and used another area and after two weeks of this the stain remained and I then continued eating my Iodine rich foods.
If you eat a very stringent diet you can deplete very easy so it is very important to keep this in your body even whilst fasting, which is what I failed to do this last few months, depletion that fast!
I'm still shocked that my body took that much in!