General rule: It's the railway company that does count, not the size of a city.

So of course you are allowed to travel to small cities, too - if one of the participating railway companies does go there.  

Just be aware that the rail planner may not always be correct. But most of the time, it will show it if a connection you do find is not in the pass network.

If you'd like to verify this for a specific country (additionally), you do find a list of participating railway companies per country here: https://www.interrail.eu/en/plan-your-trip/tips-and-tricks/trains-europe/trains-country.

Great, thank you for the helpful information.