Hi Taysir,
This is a good question and one for which there is no 'right' answer, in my opinion. Taking the approach suggested by your spreadsheet, your chief danger would be thin or duplicate content. After all, your services in Oakland are likely to be identical to your services in Fremont, or in the multiple cities in your service area. You can go this way, of course, provided you can find a genuine reason for creating this type of content and have the resources to make each page totally unique. Often, I've found that this is not the case, so I prefer to recommend this approach in most SMB cases:
You create 3 types of pages.
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City Landing Pages, one for each city, talking about the location and summarizing services. These pages would be optimized for your CORE service phrase + city name.
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Service Pages, one for each service. You can link to these from the city landing pages. These would be optimized for the individual service, but not for a particular city.
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Future Pages. I like best to give the client the ability to blog about their projects and news on an on-going basis, giving them the opportunity to begin building up content that covers a variety of keyword combinations, over time.
I find that this approach makes projects with SMBs manageable. We get really strong pages for each of their cities and each of their services onto the website, and then give them the power to begin showcasing their work in various cities via an on-site blog.
So, that's my typical project structure. I'm not saying that you can't go the other way - the way you've mentioned - just that there is an inherent danger in that approach with small, local businesses because they may be tempted to create a ton of content at once that is of low quality instead of being exceptional.
Hope this helps!