A quick take on your questions. Hopefully someone with more mapping experience can give you more detail:

  1. Why do some maps use images for the "backdrop"?

    File size and computation time, mostly. Drawing complete maps with buildings, roads, and topography requires a lot of data and a lot of time for the browser to render it. If your browser DOM gets too complicated, it can slow down all interactions even after the original drawing.

  2. If I go with the images approach, are there any limitations to the features I can add?

    There's a reason most interactive maps use multiple layers. The background images are best for the underlying "lay of the land" type imagery, anything you want to be interactive should be on top with SVG.

  3. What are the copyright implications for using images?

    If you're using someone's images, you have to follow their licence. You might want to look at the OpenStreetMap project.

  4. Are there any examples where geography is added purely through TopoJSON?

    I suppose that depends on what you mean by "geography"; Mike Bostock has generated topoJSON for a variety of features based on US Atlas data.

    As for whether it makes sense: TopoJSON encodes paths/boundaries directly, and encodes regions as the area enclosed by a set of boundaries. You could use it to encode streets and rivers and even building outlines, but you're not saving any file size relative regular GeoJSON because those paths generally aren't duplicated the way that region boundaries are. Relative to using image tiles, any improvement in file size would be countered with increased processing time.

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