Thats all AT&T coverage, not roaming. You can specify roaming in the settings
Right. Zoom in and you'll see that most areas in the midWest are with partners (roaming) and therefore are places where you cannot own an ATT phone as a resident.
The fact that the iPhone is not available in roaming areas is very well known. There have been numerous articles about it, such as this one or this one (which are slightly out of date, since Vermont just got the iPhone due to Verizon divesting holdings.)
The people who live in those areas, such as the person I replied to above, already know it.