I don’t know the full extent of the timeline in which St. Peter was said to have been in Rome and eventually martyred there, but I’ve read from other scholars and theologians, that at the time he wrote this letter, he was most likely still in Jerusalem.
There are other passages in Scripture which seem to point to Jerusalem as the harlot city as well. If the Church is the new bride of Christ, the old bride was undoubtedly Israel. No other nation fits the symbol of the harlot, because no other nation betrayed the covenant.
The reason this spiritual fornication was so disastrous, was because Israel was supposed to be the faithful bride of God. Instead she turned from God and played the harlot with the other pagan nations.