For Question 3, how do I define the domain of Xt, is it discrete, etc.?
We suggest that you discretize your domain, dividing the 1 square mile map into square feet (5280×5280) or square yards (1760×1760). Another possibility is to discretize it according to your transition model, in which you are traveling roughly 30 feet per move (2mph for ~10 seconds). This makes your map 176×176 and may simplify your transition distribution. That said, if you understand continuous distributions and would like to formulate this as a continuous domain, go for it!