Letter VII was widely publicized and well known while Joseph was alive. Here's a chronological summary:
1829. David Whitmer hears the term “Cumorah” from a heavenly messenger even before he reads the text .
1830. Oliver Cowdery tells Lamanites about Cumorah.
1835. Oliver Cowdery publishes detailed history of Joseph Smith, including Cumorah, with Joseph’s assistance.
1835. Joseph Smith directs his scribes to copy Oliver’s letters into his journal as part of his life history.
1840. Orson Pratt publishes Letter VII in Interesting Account of Several Remarkable Visions.
March 1841. Benjamin Winchester republishes Letter VII in the Gospel Reflector.
April 1841. Don Carlos republishes Letter VII letter in the Times and Seasons.
September 1842. Joseph Smith writes the letter that will become D&C 128, referring to "Glad tidings from Cumorah!"
1844. Oliver Cowdery’s letters published in pamphlet form in England.
Then, in 1920, the footnotes about geography were removed.
Two-Cumorah theory arises.
In the 1920s, scholars began to advocate a Central American setting for Cumorah, known as the "two-Cumorah" theory. This history is well outlined in an excellent article by Matthew Roper titled "Limited Geography and the Book of Mormon: Historical Antecedents and Early Interpretations," available online here.
1917-1924. Louis Edward Hills, RLDS. Published studies arguing that all Book of Mormon events, including final destruction, took place in ancient Mesoamerica. He rejected the hemispheric interpretation.
1922. J.F. Gunsolley, RLDS. Cumorah must be in southern Mexico.
1920-1926. Janne Sjodahl, in the Improvement Era, suggested narrow neck of land was the Isthmus of Tehuantepec.
1928. Jean R. Driggs proposed that Cumorah was in Honduras.
In 1938, Joseph Fielding Smith, then an Apostle and Church Historian, addressed the new trend.
"Within recent years there has arisen among certain students of the Book of Mormon a theory… that… the Nephites and Lamanites were confined almost entirely within the borders of the territory comprising Central America and the southern portion of Mexico…