It may be late, but I may as well add my take on the 'City of Invention' metaphor.
I believe that the idea Fay wishes to convey with the metaphor is the idea of a creative writing process being like the structures of buildings, and where each area in the city resides the novels that are consistent with the level of quality Fay believes is attributed to the book. The idea is that a good novel starts with a sound 'foundation', and her idea of the 'City of invention' is to try and persuade Alice (and the readers) to not write or read a piece of literature that is written using a formula, or something that can, if you will, be compared to 'fast fashion' for example. Basically that an all-round good book cannot be made without a solid idea and foundation.
I hope this helps a little.