I will attempt you help you guys (or make of worse. Lol)
First and for most, this has nothing to do with the failed Country Musume audition (that audition was looking for girls all over Japan, not just in Hokkaido). However, it could be inspired by the group (initial based in Hokkaido) and the recent promoted members from that prefecture (Inaba, Tanimoto).
As of now, they are simply just looking for members specifically from Hokkaido (hence the term "limited"). They did not mentioned if it's to add girls from Hokkaido to an existing group or if it's for a new unit. They did not described if it's for main H!P or something like Hello Pro Kansai, although it's already speculated by Nikkan Sports that it might be for a Sapporo based unit. This audition is not for Hello Pro Kenshuusei, you have to audition for that separately.
The girls selected will have to be able to commute to Sapporo to get training.
This is why people like me are speculating that it might be for a Hokkaido unit and/or Hello Pro Sapporo. It would make it easier for future KSS members from there for get training if something like Hello Pro Sapporo happens.
I find this audition to be interesting. With the lack of information we have, it could turn out to be a surprise.