I was questing the other day and needed to find Grimal. He wasn't in his usual spot, so I asked the NPC's close to him "Where's Grimal?" just to see if this would work. I mean hey, they've been standing together for the last 10 years or so, so they should at least know who he is, right? Sure enough, I got a blanket answer to the effect of "I know a lot of things, but not everything." or something like that...
While it might not be practical and reliable for an NPC to be able to tell you where another NPC went or is headed to, a better blanket answer would be one that at least acknowledges the NPC.
Here's an example:
"Where's Grimal?"
[NPC checks to see if Grimal is reachable with target command]
if not: "Grimal? I'm not sure. He was here earlier today. Try back later.
if so: "My buddeh Grimal? Can't be far, he was here a second ago." /shout "Yo Grimal!"
Just a thought.
--edit---
Oh, you know what would be awesome? Imagine the above scenario. Next, NPC1 /shouts for NPC2. If NPC2 is within /shout range, he yells back something like "I'll be there in a minute!" and then runs to NPC1!