If I pickpocket a whole city, does that mean I can't pickpocket anything else in that city for the rest of the game? (respawning guards aside)

Once you have pickpocketed it won't be coming back.
Go to a nee city and pickpocket the people there. Try to pickpocket everyone in the game.

Seems like a waste of perks then. Forget pickpocketing.

I guess there are always bandits and the like.

I've only ever used it to help out the thieves guild special jobs.
Other than that it's only for fun.