StackOverflow says that you are a new contributor and to be nice. So I won't say what I feel like saying first off after reading your post.
You have left a lot unsaid, I feel.
Unsaid about yourself, your field of study, your career intentions - even your nationality. I raise nationality as your approach to this question is not the usual US approach to such things. Even Europeans don't want to micromanage their career like you seem to want to. There's also a very strange deference to the viewpoints of senior colleagues - something that has gone by the board for decades in the western hemisphere. Maybe you are first generation Indian-American, Pakistani-American or Chinese-American and have been doing what your parents advise up to now. That excess regard for older people's views on your life decisions no longer washes in today's world. Believe me, the one thing you need to do in academia is to be your own man and trust in your own experience, your own analysis and your own decisions until events show otherwise. In other arenas like business, industry, even the professions, you can get by on group-think and following-my-leader. But the stark individualism of academia (in research moreover) makes it vital to determine your own perspective soon after your PhD starts. Mistakes made from your own analysis plus your own experience are honest mistakes. You shouldn't be too proud to make them or too embarrassed to acknowledge learning from them. So, love and respect your parents but make your own decisions. And try to respect faculty members' viewpoints on their field of expertise - but draw a line on their input to your career. I'd personally only listen to those professors who have shown that either (a) care for all students welfare or (b) care particularly for your future. But even here you must take the full responsibility and decide yourself.
I've also seen posts where Ph.D. advisors suggest their students apply to specific post docs/jobs etc. Can you specify that you refuse to move from a specific city? Is it even realistic to pursue an academic career if you're not willing to relocate (perhaps even multiple times)?
I feel that you are not telling us the full story here.
I get the feeling that your viewpoint on your career (perhaps even on life opportunities in general) may have prematurely crystallized. Your comments above betoken a naive trust in a self-chosen 'orthodoxy' - albeit one occasionally supported by instances where a supervising academic may act with immoderate or ambiguous interest where an ex-student is involved - that isn't really the norm at all.
Let's get something straight here.
You're not going to get any interview or appointment on the back of playing your supervisor - however subtle an operator you may think you are. Even if you did it would be so much the worse for you: the high expectations of your new employer/supervisor and the likely lack of commitment on your own part having got the opportunity without real personal effort would soon lead to disappointment on the other side. Then where do you go ?
So, you may have read that Prof X suggests some internship/fellowship to student Y but this is very much the exception rather than the rule. And God help you, if you think you can specify the location of a job that you are prepared to consider your professor recommending you for then you are in cuckooland and damn well you know it ! On the last question, I know that some colleges appoint many of their ex-undergraduates and many of their doctoral students to their staff. As other posters pointed out, sometimes there is a brief low-level sojourn at another college until they 'return' to their alma mater. But look hard at the quality staff in your own college, even your own department. Not just faculty but those in support positions. There are always lots of foreigners among this group. In my own experience, the only genuine educators I met in my own country were foreigners. They were the ones who broke the old mold of bad curricula, boring lectures and mindless assignments and projects. Having got their positions mostly through familiarity with senior faculty, the native staff were naturally unwilling to appear disloyal by pushing for changes that they may privately have favoured. So I don't think it serves the students well to have faculty who are ex-students of that same college and certainly not also natives of that city. To me, a university's ranking for educational quality is synonymous with its commitment to new blood faculty appointments - the alumni just don't want the social hassle, if they care at all.
Despite experiencing a lot of drama and negativity at my university, I love my city and hate the idea of relocating. Sometimes I even think of reapplying there just so I could stay in this city (this is its only university) and still attend grad. school, but the negativity would be a lot to deal with. There's another program that seems like a good fit for me, but I think I'd be miserable in another city, even if I enjoyed the program itself.
You're saying 'drama' and 'negativity' but not what you mean by that. Drama in everyday life can be good, e.g. colorful characters, vigorous debate, horseplay or humor, or bad, e.g. personality clashes, bad feeling, psychological warfare, workplace politics and worse. Negativity can be as innocuous as a thickly conservative approach to all things or as soul-destroying as those individuals who dedicate every breath of their being to stomping down other people's sand-castles. If it's the latter end of these spectra, you know you have to go elsewhere if you want to have an academic career. Even if it's something less severe but still a drag on your humor and appetite for the workplace and those in it, you have to go. Firstly for your own nerves' sake as events outside work will present their own problems and no one can fight wars on 2 fronts. Secondly (but to the wider community this is the primary reason) you owe it to others - particularly students and their hard-working parents - not take on a task on their behalf that you have no real zest for yet still choose to do just so you have a secure status in your home city. If you do, you'll become a part of that negativity and drama that you claim to dislike.
You have been in just one city and one college in your life - yet still fear the challenge of another. Don't dress it up as being content in this community and doubting if another city could provide that same sense of congeniality. Good cities don't allow bad colleges. The colleges are the one hope for social advancement in most cities. All the important questions about what's wrong in the local community are raised there, many by newly arrived faculty from other parts of the country or world who have experienced better organized situations elsewhere and ask why not here too.
The thing I just don't get here is how someone could aspire to an academic career but still not have a strong appetite for new experiences, new people, new opinions, ideas and most of all new cultures. Don't you ever get tired of the men or womenfolk in your home town ? Don't you ever get the urge to get off your ass and do something radical about it ?
Higher learning (i.e. learning not just for economic advancement) and relocation to new community have always been inseparable. Christ, even astrologers put both higher learning and distant travel into the 9th House with theology and philosophy.
If you want to be a serious academic, you've got to embrace this happily - otherwise you won't be positive to the spotty teenager asking the awkward question one frosty November morning in your first semester as assistant professor.
If you can't resolve this, you simply aren't cut out for this profession - it's just the security and conveniences of it that are attracting you.
Gemini, having read this post I would categorically say that you have no future in your current college until you prove yourself elsewhere. And you know that this situation is entirely of your own doing. I also agree with others' point on getting some help on self-awareness, as opposed to awareness of others behaviour which you seem to analyse quite well.