"They are near the house."
Translation:Oni są blisko domu.
Because 'near' is very relative. If you're coming back home and take a call from your mother, you can say that you are "near" the house but it can be let's say 600 metres - which would be a really small distance compared to the whole way home from the party, but still 2 more minutes of walk.
"Obok" should be a lot closer, literally 'next to'.
Good question. It generally can, but it works a bit differently then... and not in such a sentence. I think it works in a sentence like "It is close to the beach" (Jest blisko do plaży) - where "it" doesn't refer to anything specific (like "the hotel is close to the beach"), but is just a dummy pronoun like in "It is raining". I can also imagine "Mam blisko do sklepu" - literally something like "I have it close to the shop", so effectively saying that there is a shop close to where you live/are and you don't have to walk far.
But "Jestem blisko do domu" would make no sense.
I hope it's more or less clear... it wasn't an easy question to answer ;)