The system is very intransparent, yes.
However, I've witnessed the cohesion effect myself, where, as Vlandian vassal with overall good relationship with my fellow vasals, received two cities and three castles all in one continuous area even if I wasn't involved in the conquest of the castles.
The game will always suggest landless lords so it's in your interest to get them a fief you're not interested in to improve your odds for one you actually do care about.
Here's a screenshot, I received the next closest castle, not pictured, a bit after the screenshot was taken:
Essentially, you have to work and plan within the system: first the landless lords, then the ones in close proximity. That also means that you'll need to consider when to participate in a battle or siege because it won't always pay off immediately the way it did in warband. Relationship does tend to factor in I believe, but Proximity and existing fiefs appear to be the more important aspect.