It works in a similar way as a canonical tag does to show when a duplicate version of a page exists. But in this case, it helps Google index local content easier within local search engines. It also helps to pass trust across sites and improve the way Google crawls these pages. To know more about how errors you should not make when it comes to hreflang tags, you can check our previous article.
As pointed out, they are certainly not the same, but it might not be a bad idea to track and report on the direct traffic. If there has been outreach done and the company is mentioned in print with a URL, direct traffic (along with some search traffic on the URL or business name itself) is likely to go up. If your email newsletters are not tagged, they're likely to show up under direct traffic. Depending on your role, some of what you do under the greater SEO/inbound marketing role can show up under the direct traffic.
I think for agencies as far as how we appear in organic search ourselves, we are definitely going to need to leverage all 3 of the solutions you talk about and agencies who haven't branded their products/services are going to have to do that and are going to have to also employ branding strategies. In addition, we have to optimize for other search ares like you say in your point #2 and we must look at optimizing existing content for voice search and answers/featured snippets like you say in point #3.
BrightEdge research supports that a blended approach is best for delivering high performing content. Not only will combining organic and paid search increase website traffic, but it will offer a bigger return on the investment. Take Retail, Technology and Hospitality industries, for example — organic and paid search combined make up more than two-thirds of their total revenue.