Brace yourselves for gravitational waves

[vorlon13]

Wife and I have been discussing this exact question over dinner just now  They probably did  fit the shape of the signal (which has features such as frequency, change in frequency, relative height of peaks) to their general relativity supercomputer simulation to fit the two masses - they hinted at that in their presentation. My guess is that from that comparison you get the radiated power, and knowing the theoretically derived power of the source and the size of the signal as measured on earth, you can derive the distance by calculating how much it has gotten weaker on the way, in this case 1.3 billion lightyears or so. From the time delay between the two detectors you get an approximate region in the sky from which it likely came (roughly the direction of one of the magellanic clouds, but of course much farther away)

I would imagine that if there had once been life in the neighborhood of the merger, there isn't any longer..

Indeed, and 20-35 solar mass progenitor stars are big nasties throughout their lives.  So, anyone close would already have been zorched by prior misbehavior.