It's three hundred years of not being able to travel further than you can return from in one day. This is not the same thing as totally walled into your town. That means that communication was entirely possible between villages, and ultimately across the length of the land.
Additionally, there is a critical story element here, the Rust Brothers are (in part) able to travel. That gave them stranglehold on the entire land. If you piss them off, guess who gets reinforcements when you're stuck with nothing more than your birthrate? People are willingly giving their family over to the Rust Brothers as sacrifices for a reason, they had an obvious and incredible power that no one else has had for 300 years.
Aside from the Rust Brothers, Wolfkin had substantial power for those 300 years. Obviously, it did little to give them a reputation as "not demons", since they're the only "kin" that have that ability... There were of course the blood sacrifices in the woods and affinity for the Rust Brothers, so that's all very complicated. I imagine Wolfkin held an interesting role as messengers for those centuries.
Finally, here's why you do not want to be in the "opening days" of the lifting of the Blood Mist. Plain human psychology. It might seem interesting to be the post-apocalyptic explorers, but honestly, nothing has had a chance to develop yet. People are just considering leaving their homes at that point. And why should they? For centuries, every parent has told every child, if you leave, you will die. Barring conflict with the Rust Brothers or natural disaster, most of these communities are stable if poor. They've managed to put something together that worked for centuries. That's not something you just abandon by sending your best and boldest out into the world to see what's there... Five years after, young adults have grown into their own and maybe not been told that there is no future other than within the house they were born in. Those are the people I imagine are wanting to see the world!
If you do the opening days, you have more "discovery", but it's insular discovery. You have no political intrigue between the factions, you don't have Yawim with his established beer boat business, no one is considering putting together armies to challenge the Rust Brothers, etc. For me at least, this is way more interesting than "Look, a new town, I wonder what kind of weirdness they got up to for the last 50-300 years..." The latter feels like Star Trek, and I'm more a Star Wars guy, so that's probably the difference. I see merit in Star Trek too, so have fun if that's what you're looking for.
I had the exact same knee jerk reaction to the basics of the setting. Three-hundred years?! That's ridiculous! No one would put up with that. Once I really started reading the material though, it started gelling in my mind. Ok, not every did put up with it. People fled south and were cut off. People fled to the ocean, and again, were cut off. They were slowly pushed into their communities. Larger communities collapsed from the strain of not having an agrarian base to sustain them. For every village that survived, I assume a dozen or more were swallowed up over the years. Dark gods like Rust and Heme were launched into ascendancy as their followers were granted powers that no others possessed. The people who were most likely to do something about the situation either did (and left) or died trying. Everyone else has just been trying to survive. Generation after generation of hopelessness where the big excitement was having a couple Rust Brothers show up to take some taxes, find new recruits, and maybe grab a sacrifice or two. All that makes me feel like five years is about perfect. People are maybe starting to think about opportunities that haven't been discussed in generations. Maybe the Rust Brothers shouldn't be in charge? Maybe we should start really trying to form alliances with our neighbors? Maybe all this inbreeding isn't the best thing for us? (on that, I'm pretty sure there needs to be allowance for marriage allowing people to change villages or we pretend all the characters aren't totally inbred... I'm sure religious ceremonies were devised precisely for this).
Anyway, is the 300 years of Blood Mist super important? Probably not really, but I do believe that if you're in that "no on alive has seen the land before the Blood Mist" range of years, then the five years after is important. Or at least, there is a lot you need to change if you're doing a "first people into the world" campaign. Sorry for the novelette, but I've actually thought a lot about this...