You can also increase local population density through access to a highly productive local fishery (which includes more than just fish, including shellfish, seabirds, and marine mammals), whether on a lake or bay.

Honestly, for a 'very isolated' city the best choice is probably an island anyway since it's the easiest geographical barrier to explain (mountains, jungles, and deserts are all viable as well, but introduce complications). In that case the city need not represent the entire population of the island, but it can serve naturally as the sole administrative center.