Obviously, water that is not moving has no energy in it. And water that is being pumped is not a source of renewable energy, since it takes more energy to develop the pressure than can be gotten back from it. Some fish-bearing streams may not be a wise choice for development due to environmental impact. And of course, you need to have legal access to the water source, and the ability to tap it without undue restrictions.
Very high-head sites (above 500 feet) can be costly to tap because of long pipe runs and high pressure. Tapping a part of the available head can be a viable solution. Also note that water sources that have very high water at some time in the year make for difficult intakes. High water often means a lot of debris comes down the stream, which can clog or damage intakes. And some intake designs do not function well if submerged.
Other inappropriate sources would be using drinking or irrigation water systems just to make electricity. These sources often rely on energy to pump and pressurize the water, so they are not actually renewable energy sources. And the intended end uses often need pressure, which a hydro system brings to zero. In addition, the volume of flow is usually not adequate to make much energy.
Several measurements are needed, and there are multiple ways to obtain most of them. Most important is to take very accurate measurements of head and flow. This will tell you how much power is available, and the type of turbine appropriate to the site.
To measure vertical drop (head), you can use:
To measure flow (this is best done multiple times throughout the year to ascertain seasonal variations):
See “Intro to Hydropower, Part 2: Measuring Head & Flow” in HP104 for more details.
This depends on the scale of the system, the power available, cost of alternatives, the system voltage, and the terrain, among other factors. Penstock and transmission cable lengths of more than a mile are workable in the right situations, though less than 1/2 mile is more typical.
If you need long pipe and long cable, the site will need to be very good or the economics may not work. But if you need a long pipe and a short cable or a short pipe and a long cable, you may have a viable site. There are too many variables involved to generalize on distance limits, because so much depends upon the diameter and the material composition of the penstock that is required for the local conditions, and the voltage, distance, and size of wire.