Well in the US we don't have townlands (at least I've never heard of it). But we have towns, townships, and villages and probably some others. But people think of any one of these nomenclatures as a city. Everything is a city no matter how big or small nor what they really classify themselves as. When you fill out any form it asks, Name, Street Address, City, State, Zip Code. So everything is a city regardless.
So for you when asked for city I would enter in Castlecomer and I would not call that a false city. I understand you have separate distinctions in your country but you have to look at it from the perspective of the software and how it was written. Castlecomer is over 10.5 miles from Kilkenny. From a software perspective that is only asking you for city it doesn't make any sense for you think you are in Kilkenny.
Think of it this way. If someone wanted to now the weather at your location, would they be thinking of the city of Kilkenny or would they think of the townland of Castlecomer? I think they would probably think of the townland of Castlecomer. So use that for your city as there is no place for a separate townland in WU. And isn't that (Castlecomer) what you were using as a search anyway? So that settles that.
I'm in a similar situation. I live 12 miles from Orlando, FL (as the bird flies). If I meet someone that doesn't intimately know central Florida and they ask me where I'm from I tell them I'm from Orlando. But if I know I'm talking to a local person I tell them I'm from Winter Springs, FL.
As for wind data quality, yes you are correct. Seems WU doesn't judge wind as rigorously as temperature. They also don't mind humidity errors either.