I have my 2 gal tank mounted under the rear passenger door to the frame. I have run lines into the engine bay where I have the horns (and planning on compressor) mounted where the spare batt location would be. My question is even if this is a closed/sealed system would the distance of the compressor from the tank cause any problems if there were no leaks?
It should not cause any problems as far as leaks go; however, it may hurt the compressor performance very slightly.
it wont hurt the compressor because the check vavle is still on the line…so its like u have a little more volume with the added piece of hose
I have the tank under the car and the compressor inside. with about 6ft of DOT line in between. works just fine. 
^ X2 You may lose just the slightest performance but you gain extra storage.
LOL - the storage in an air line is going to be so minimal (especially with train horns) that you will never see any improvement. A K5LA that flows 70 CFM will inhale that volume in a nanosecond…
If the run of air line is very long, consider breaking up the run with a check valve installed at the tank. Its safer for use, and safer for the compressors. Overall, there will no negative effect on the system or its performance IMO. I’d recommend that you also use compression fittings, not PTC (push-to-connect) fittings.
Yes use all brass, and braided line since the air gets hot fast and will melt plastic line, and the possibly the rubber in the P.T.C. fitting. Also you dont want leaks in any situation.