I don’t think this is crazy at all! I’ve thought about this in different ways for years, I think it’s a really fun idea. Roleplaying anyone in a real town just seems so interesting to me. The concept of roleplaying is “playing the role of someone else,” after all.
It sounds like a fun way to learn about your surroundings and local history. I did this for New Orleans a couple years ago for a horror RPG I was thinking about! I learned so much about the city, it was a lot of fun.
As a related example in fiction, author Dan Simmons wrote a horror series set in a town that was essentially his childhood hometown in the Midwestern U.S., featuring him and his friends. I read it specifically because it was about that! I love adding a layer of fiction on top of reality.
I think if you start believing the conspiracies, you might want to go see someone. But making fictional versions of real life things is absolutely fascinating to me, and I’ve always felt like gurps has the breadth of tools to make it happen.