use of the relative adverb "where" - a case where

Where is not only used for location:

[Merriam-Webster]

adverb
1 b : at, in, or to what situation, position, direction, circumstances, or respect
// where does this plan lead
// where am I wrong

conjunction
3 b: at or in which
// has reached the size where traffic is a problem
// two fireplaces where you can bake bread in the ovens
— Randall Jarrell
4 b : in a case, situation, or respect in which
// outstanding where endurance is called for
5 : THAT
// I've read where they do it that way in some Middle Eastern countries
— Andy Rooney

There is nothing at all incorrect about using where when in any of these constructions. It does not need to be used only for a place.

Yes I think you can. We usually replace a (preposition + which) structure with "where" for example:

That's the restaurant in which we met for the first time.
That's the restaurant where we met for the first time.

But is also work when "instance" is used.

There was an instance where it got out of control.

instance = antecedent, it = pronoun

Be careful with this type of construction. "Where" is appropriate when place or location is involved. It may be less clear -- although common in speech and casual writing -- if used as a substitute for "which" or "when."

That is one of those jobs for which prior experience is required.

That is one of those jobs where prior experience is required.

Some would consider the second case to be less formally correct, because a "job" is not a location. I do note that the third (adverb) definition in Webster's New World Dictionary (Fourth Edition) is:

"in what respect"

And it gives the example "where is he to blame"

So in that sense, where is not absolutely a reference to location.