1) We rule (Rambam, Laws of Shabbat, 27:2, Tosafos 57a, d"h Rav Huna) that we give a person the entire city, even if it does not have walls. However, when it comes to discussing "squaring off" of a city, Rashi (and Mishna Brura) talk about walls, since this certainly makes it easier to discuss the city's boundaries. How do we determine the city's boundaries if it has no walls?
2) Tosafos (57a, d"h Rav Huna) says that all houses within 70.66 amot of each other form the city. This is about 100 feet. Question: How would this work in suburbs nowadays. Many houses are 100 feet away from neighboring houses, and certainly houses on one block are 100 feet away from houses on another block. Is each block its own "city"? Can we count the distance from the (unwalled) front and back yards, or is it only distance between the houses themselves? I realize that with an eruv, everything is considered within walls, but for a suburb without an eruv, one could be restricted from going 2000 amot (approx 0.6 miles) from his house/block - and me'olom lo shamanu davar zeh.
3) Also - regarding joining neighboring cities. What if two cities are not within 141.33 amot, but when you square off each city, the squares overlap (for example, Manhattan squared off liribua ha'olam overlaps with New Jersey and Queens. Are they one city or two?
4) Finally, if a squaring off includes uninhabitable area, eg, a river, would this interfere with the squaring?
1) The city would be defined by the houses. The lines for the Ribua would be drawn from the last house that is within 70+ Amos in each direction.
2) I could not find any source to suggest that the halachah would be other than you suggested. Houses which are spaced more than 70+ Amos apart are not considered to be a city and each house measures its Techum from its outer walls independently. (Chayei Adam, Chazon Ish 110).
The Ritva (61a) explains that a river is included in the Ibur of the city even though it is not a Beis Dira because it is right in front of the city and used by all the inhabitants of the city. Perhaps the unwalled back and front yards of houses which are for the use of the house can similarly be considered an extension. (I have no support for this.)
3)If the Ribu'im overlap then the two cities are considered as one (Chazon Ish 110 #16, Minchas Yitzchak vol 8 Siman 33). The Minchas Yitzchak implies that even if the 70+ Amos that we add to the Ribuim, according to the Rama, overlap then the cities become one.
4) We see in Shulchan Aruch O.C. 398 #9 that a river can be included in the Ibur of the city if it is used. I did not find anything to suggest that a river would interfere with the Ribu'a.