Weather observations are sourced from data collected by weather stations. In Australia, there are over 7000 weather stations managed by the Bureau of Meteorology (http://www.bom.gov.au/climate/data/stations/about-weather-station-data.shtml).
However these 7000 weather stations do not provide full coverage of Australia. The distance between stations can be 10's of km, but at other times it can be a lot more. The Weatherzone app will choose the closest station to the user's location.
In the example below, there is no weather station in Fremantle WA, so the closest weather station reference is ~15km north in Swanbourne. If you prefer to see observations from other nearby weather stations, simply swipe the observation panel to left/right.