Yes, as you correctly note, the Lexington market extends far beyond the range at which it could be received OTA (unless you were on a mountaintop), moreover, even if the distances aren't extreme, you have all of those valleys that block out signals. To be fair, though, other markets might be blocked out as well, though they didn't suffer from the handicap of being UHF back in a time when that made a huge difference. Very often, OTA reception came down to what side of the mountain you were on, and whether you fell in a reception sweet spot or not.
Taking a look at the 1975 Broadcasting Yearbook, the following counties, now in the Lexington DMA, were in these markets:
Tri-Cities - Perry
Knoxville - Jackson, Clay, Laurel, Knox, Wayne, Russell, Whitley (Leslie County was also in that DMA, it's now Tri-Cities)
Charleston-Huntington - Knott, Magoffin, Morgan, Wolfe, Rowan (also Letcher County, now Tri-Cities as well)
Cincinnati - Fleming
There was at least one year (I'd have to page through several years of BCYB and TVFB to find it, that will be a research project for another time) when Robertson and Harlan counties were in the Lexington market, and IIRC, so was Leslie County. Leslie County has bounced back and forth between Knoxville, Tri-Cities, and Lexington, but as of now, it's this odd exclave of the Tri-Cities market. Long story short, the Lexington stations aggressively pursued viewers, got on cable (though not translators, that would have helped immensely), secured their loyalty, and in the 1980s, one of them, WKYT, took advantage of a situation and snapped up WKYH, which was struggling (to put it mildly). Lexington is one of the great urban success stories of the 1970s and beyond, it just keeps growing and growing, robust economies with many drivers (education being among them), easy access via the interstates and the Mountain Parkway, and from a pleasant little town known for horses, became (after a fashion) the largest city in eastern Kentucky, while being just on the edge of it. People wanted to get their TV from there.