Welcome to Namepros
1. NAPTR records can be used for any DNS zone - they're not
exclusive to the .tel TLD.
2. NAPTR can indeed point to anything.
3. The use case you describe of phoning people using their .tel address is correct - the phone software can simply resolve their phone number from the DNS, just as it currently resolves domain names to IP addresses. The
Kiax Softphone does this already. There are also apps for the Blackberry and iPhone.
4. GPS data can certainly be used with .tel. I can well imagine lots of apps springing up that pull .tel DNS records and do all sorts of cool stuff with it.
5. NAPTR records can point to other NAPTR records. So yes, what you described would be possible, but in violation of Telnic's AUP - you're prohibited from delegating control over sub-domains to third parties. You could however run a directory listing for Smiths - you just couldn't give people their own sub-domain. At least that's how I understand it.