Todd, what Don said is mostly correct....but you can have very shallow earthquakes...some in the east are in the upper km or 2. Also, there was a M3 or 4 in a diatamite quarry near Lompoc that had a 80 cm surface rupture....the hypocenter of this must have been very shallow. It was an earthquake, not a blast....but removing the vertical load by quarrying helped it happen. Also...let me reword something Don sai...he is correct, but it may not have been clear: a hypocenter is the point in 3D where a rupture intiatates. The earthquake occurs over a larger area that can, and often does, include the surface. And, active and inactive faults are exposed all over the place at the surface, and we do study and learn from them. I';ve measured the scratches and grooves (striations/slickensides) on about 1000 of these around California. Turns out some area that were supposed to have thrust tectonics are instead strike-slip....
Chris