For a very long time the entire extended family was within about 30 minutes: my parents, the in-laws, my siblings, DW's siblings... the whole gang. Overall it was wonderful, especially once we and the siblings started having kids. Lots of cousin time, and having the grandparents around to help with childcare and date nights was amazing. Of course, there were a few downsides as well, like expectations that we'd be around for every family event/holiday, so we had to put up some reasonable boundaries, including things like not just dropping by unannounced. A minor inconvenience, really.
Now the family is spread out all over the Western US: WA, OR, ID, CA, AZ. We moved to Boise and my parents followed us here. Most of the siblings have scattered about, with a small few sticking it out in the old location of Coastal CA. What happened? Housing just got too dang expensive. Even for us, FIRE and owning our home outright, it didn't make sense to continue living in Coastal CA, and our main motivation was moving for the sake of our kids as they grow into adulthood. That's the crazy thing with places that go full NIMBY -- sure, if you're a homeowner things look great on paper, but if you have kids/family it makes it very likely that they'll get priced out and scatter.
I'm not complaining about moving. It was absolutely the right thing for our immediate family, especially our kids. This becomes more and more apparent the longer we live here. And in many ways Boise is a much better fit for us and I love the natural beauty, the four seasons, abundant wilderness, and our amazing walkable/bikeable city. But leaving family (and friends) was the most difficult part. We've made a ton of great new friends and have formed a solid community here through our church, so it has all worked out. Part of me, though, still longs for the days when all the family was local.
Part of the reason we picked Boise was it's relative proximity to the CA and the PNW. It's a day's drive to the Bay Area and Seattle. AZ is tough, and honestly we don't visit family there much -- it's also just too hot there during the summer months when the kids are on break. Family members generally come to Boise to visit 1-2x/year, usually Thanksgiving and/or summer.
All that to say, I don't think there's a "right" answer to your question about how close is close enough? It really depends on your family and specific situation. If you're close with your parents then moving any distance is going to be tough. IMO, there's something about moving more than 1 hr away that really changes things, as this makes informal gatherings a lot less attractive. At around 3 hrs away and visits become full day commitments. More than 3 hrs and visits become multi day affairs and are a lot more complicated and expensive.