How far does the direct light reach?
D&D is not a physics simulator; we have no basis to decide how far the light from the Companion can actually reach. Does light propagate infinitely in a vacuum? How much light is absorbed by the atmosphere of Faerûn? How curved is the surface of the planet? How greatly does the gravity of the planet curve the path of the light? We simply don't, and can't, know these things. We do have citations for how far the light can be seen, though.
From how far can the light be seen?
The direct light which comes from the Companion can be seen for miles, as the quotes from Raj's answer demonstrate. As a light source, it is more easily visible at night than in the day. Within fifty miles of Elturel the land is in constant daylight due to the light of the Companion. Beyond that the Companion is visible at night "as a bright beacon in the sky" and can be seen from "as far away as Boareskyr Bridge and Berdusk, looking like an unmoving star low on the horizon." According to the Sword Coast map in Rise of Tiamat, both Boraresky Bridge and Berdusk are approximately 125 miles from Elturel. Baldur's Gate is approximately 150 miles from Elturel and the same passage implies that the light of the Companion cannot be seen from that city. BG: DiA (10) further says:
Given the distance between the two cities, it's no surprise that the residents of Baldur's Gate didn't hear of Elturel's fate until refugees from Elturgard started arriving in droves.
This passage also implies that the light of the Companion cannot be seen in Baldur's Gate, since otherwise BG would have known immediately that something was amiss when the Companion went dark. However, as you note, the Companion is perhaps 500 feet above the city. At the furthest extent where it can be seen it is "low on the horizon". Whether it cannot be seen from Baldur's Gate because the light itself doesn't reach that far, because it is below the horizon of the curved surface of the planet, due to some local topography of the Chionthar River Valley, or some combination of the three, we are not told.
However, the light itself does not determine what is 'under it'
"All lands falling under the light of the Companion..." is not meant to imply that
Zariel
is now the master of Berdusk simply because the light from the Companion can be seen in that city. 'Under' is used here in a metaphorical sense of political subordination,
as befits a contract drawn up by Lawful Evil devil.
The passage continues "All persons bound by oath to defend Elturel are also considered forfeit," and we are told that by the Oath of the Creed Resolute this means all the citizens of Elturgard1.
Thavius was proclaimed High Overseer of Elturel after he summoned the Companion to save the city. In some sense, the Companion is a symbol of his office. 'All lands falling under the light of the Companion' is referring to his leadership, and to the oath the citizens of Elturgurd swore. Thus 'all lands falling under' is a political reference to the lands of Elturgurd, and does not refer literally to the places where the actual light of the Companion can be seen.
Note also:
Zariel is desirous of the souls in all the land so as to turn them into lemures and then promote them to devils to fight in the Blood Wars (cf. 150, 243). While the Oath of the Creed Resolute means that all citizens of Eltugurd are now hers, she likely dragged only the city of Elturel (see map 2.1) to Avernus because it had the highest population density. Compared to its hinterland, the amount of souls she could harvest from the city measured against the power needed to rip the land from the Material Plane resulted in the greatest Return on Investment when taking the city to just beyond its own walls. Citizens who were outside the city when it fell are still forfeit, but it is more trouble for her than they are worth to collect them.
1Properly speaking, Elturel is the city and Elturgard is the land, but these are used somewhat interchangeably. For example, in BG: DiA we are first told (47) that the citizens of Elturel swear to defend Elturgurd, but later told (64) that the citizens of Elturgurd swear to defend Elturel.
