I'm trying to selectively show articles in a category blog view based on the user's location.
Based on what I've read, if I added the conditional content syntax to the template's php code, it would not work, but I just wanted to confirm this.
You can put the {show} / {hide} tags pretty much anywhere that will end up in your final HTML output.
So you should be able to use the tags in template files too.
Did you try?
When using it in PHP files, you will - of course - need to echo out the tags to the output.