Looking around would probably kill the sneaking mechanism though, the NPC would just have to do a 360° to uncover our character.

I agree that the "possible range from last seen position" seems like a good idea. However it would mean going even further while stealthed, which means more AP for movement, which means less AP for hitting ... Which means probably buffing stealth attacks ?

And yeah, throwing an AOE at the last seen position seems much better than instantaneously divining the sneaking character's location to launch that AOE...