(1) Midas Sdom is defined by Rashbam Bava Basra 59a DH Midas as meaning that A is not prepared to let B derive benefit from A's possessions even though A would not lose anything through this. The implication is that if one suffers a loss it is not considered midas sdom to protest. According to this I think it is possible to understand why one can prevent guests conducting business in a strange town :- because this may very well take away custom from local dealers which means that the locals will actually lose, so consequently they may protest about the real loss that they will suffer.

(2) [Nowadays also, most places have business regulations which limit the activity of outsiders. However it is helpful to realize that in the contemporary world, countries are larger than they were in the time of the Talmud. So when the Gemara refers to the inhabitants of own town restricting the inhabitants of a different town, it might help us to think of this as if the town of those times is something similar to a country nowadays and I think we certainly do understand that one contry can demand that there should be customs and work regulations and restrictions on non-citizens and this is not considered as midas sdom.]

(3) I am not sure what you mean by saying that fellow yidden can be prevented moving in to the town and I am not aware of the source for this is in the Gemara. On the contrary, we find that the Mishnah above 7b states that if a person lives in town for 12 months he is thereby considered as one of the city dwellers and if he buys a house there he is considered as a city dweller immediately. Rashi, in the Mishnah DH v'Yehe, writes that since he is considered as a dweller this means he has to pay taxes etc. Once he pays taxes the Gemara bottom 21b states that fellow dwellers cannot stop him practising his profession. This suggests that there is a possibility of moving to a new town and attaining equal rights with the existing population

Good Shabbos

Dovid Bloom