One treachery mentions each active location, can there be more than one active location in this scenario? Cos it would really help, and make this card make lots more sense!

Also when damaging locations, do they leave play when their quest points are met by damage counters? Or can they have unlimited damage?

During the stage 4 with the Doors of Durin, the quest card says: "There can be two active locations. (so the Doors of Durin and X)

No, they do not leave play and yes they can have unlimited damage. So things can get pretty out of hand if you do not explore them relatively fast.