Yes, you are misunderstanding. There is no more chain reaction; the "close proximity" is irrelevant. The heat is generated by the unstable isotopes decaying. An

Yes, you are misunderstanding. There is no more chain reaction; the "close proximity" is irrelevant. The heat is generated by the unstable isotopes decaying. And there is nothing in the universe which can stop them from doing that. It's a misunderstanding I had as well before I read detailed discussions of the Fukushima incident: stopping the chain reaction does not make a nuclear reactor "safe". It just prevents new highly radioactive material from being generated. But the material you already have is still generating massive amounts of radiation and heat, and if you're not able to dissipate that heat (which you want to do without also dissipating any of the material!) then the heat will build up, cause it to melt, and that will usually restart the chain reaction!