Heya! The landscape leading up to the canyon is assumed to be very flat, so the dust cloud could still be a ways away.
I don't really have a good answer for how far away or how much time it would take for them to catch up ... it's all abstracted into the "timer" mechanic, so you could really scale it any which way. I think a two-day trek sounds like an eminently reasonable interpretation!
The effect of the setpieces on the story also depends on the situation. If the law is closing in the gang might see the saloon as a great place to make a last stand, or maybe the allure of an abandoned bank is reason enough.
There was another comment here proposing modifying the number of checks you make based on the speed of the slowest PC's horse, which could certainly spice up the chase as well!
Let us know how you get on!