Do villager mechanics apply vertically?
In Minecraft, to avoid villagers getting confused with breeding mechanics, etc., any group of villagers (i.e. Iron Farm, Villager Spawner etc.) need to be placed >64 blocks away.
Does this apply vertically, or is it to do with Chunk mechanics?
The distance of 64 is required between doors of different villages, not the villager entities. The distance is spherical, so it applies vertically as well - see the old DocM77 iron farm tutorial for example: