If you use Asfaloth on the active location and its attached to Glorfindel that places 2 progress on the active location. So if one of those progress tokens is excess, does it go onto the current quest?

No, it won't. The active location absorbs progress tokens that are intended to go on the quest, as a part of the general game framework. However, tokens that are intended to go on the active location (per Asfaloth's text) don't get redirected to the quest once the location is explored.