in Poland there is this new booming service for cities called LetsFixIt (in polish naprawmyto.pl). The idea behind this is that people can mark spots in city where things aren't working like they should. Theoretically this is just google map with some filters . There are two type of filters. The status filters: open, being fixed, already fixed, won't be fixed. And the problem category: Infrastructure, Safety, Buildings, Environment, Other.
Now I didn't use this yet but it's pretty simple. People can register on the site, then they can set a marker with report. Proper category is moderated by some folks and they receive message about new spot marked. Those moderators check the content and publish or not the marker and also forward problem to suitable institution (th institution that supposed to fix it). That's it.
Well I think that Hotspots is perfect for something like this. It would need some code extensions, but dude! That would be one freakin awesome feature. You could even make it as another Joomla extension. I can help You with brainstorming, planning and testing (I am shitty at programming - still learning). I can even let You know that Gruz - the author of NotifyArticleSubmit is working on new version which will Notify about new Submits not only from articles, but also from Hotspots extension - that would cover advanced email notification.
You can check the service for city of Lublin here: http://lublin.naprawmyto.pl/