^ We didn't self drive, but we book a northern lights tour, so I will share what I learned during the tour. Basically for the tour company, they will always look for northern lights regardless of the forecast as long as the sky is clear. For them, forecast is merely a forecast and is not always 100% reliable, meaning northern lights can show up even if the forecast is really low and there's also possibility that it will not appear even if the forecast is high activity.
This is actually what we experienced during our stay, on our first day trying to see the northern lights, the forecast was good and we had clear sky but we didn't saw anything that night. 2 nights after, forecast is just at level 3 but we had an incredible display of northern lights, it showed up all over the sky in all directions which lasted for hours.
Lastly according to them, northern lights appear high in the atmosphere that if it shows up, it should be visible all through out Iceland as long as the sky is clear.