I had a Permanent Resident Card for the last 5 years and I meet the continuous residence and physical presence requirements.
Yes. You need to be a resident of the specific state or USCIS district for 3 months immediately before you submit your naturalization application. But you may travel during that time. Residence is different from physical presence. You should consult with an immigration attorney about your naturalization application to have the best chance of success.
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Attorney Carlin was there first and said it all. All is left for me is to second his excellent post.
NYC EXPERIENCED IMMIGRATION ATTORNEYS www.myattorneyusa.com; email: email@example.com; Phone: (866) 456-8654; Fax: 212-964-0440; Cell: 212-202-0325. The information contained in this answer is provided for informational purposes only, and should not be construed as legal advice on any subject matter.