Yes, I've tried it with the hands. I dropped the experiment after a couple of days because of "lucid burnout" (I'd thought of nothing but LDing for a a few months and my brain had taken a battering) but I didn't expect it to work for the reason you said - my hands don't feature very much in my dreams. The question "would using the hand as a loci 'location' incubate more hand-involving dreams"? is there though.

NB: The rest is speculation - abandon hope all ye who enter here:

The Truman show sphere

The sentence you used: "Dreams are not a location and they change frequently" got me thinking about if you could kind of artificially make it seem like all your dreams are at the same location (I think, IIRC, that you meant something else by that sentence, but never mind). If your NL dreams are outside and are not obviously at some place from waking life (by this I mean you couldn't point to the location of the dream on a map in waking life (this can get tricky, because you can dream about a park that doesn't resemble a park from your WL but you can be quite specific about the location of the park on a WL map)) then could you act as though your dreams (I'll call dreams that don't obviously occur at some location from waking life "generic location dreams") are all at the same location? The best way to explain it is, you treat it as though your generic location dreams all occur in some big sphere - just like one in the Truman show. Then you could start to use locations in some way. In my case, maybe I could observe that all my alien invasions begin at the same location of the "sky" of the sphere and use that to remember to do an RC, or I could use some kind of visualisation and place "pegs" all around locations of the sphere that remind me to RC?

Generic room

So, the Truman sphere idea would cover outside locations, but what about inside? For this I could perhaps use a "generic room". Similar to the Truman sphere idea, a generic room would be a room that keeps appearing in my dreams, but a room whose location cannot be pointed to on a waking-life map. (It's "somewhere in the ether"). There could be a few ways to go with that:

Mini- dream cartography: This could be used as a more specialised version of dream cartography; instead of mapping the whole "world" of your dreams, you'd just be mapping the generic room.


Loci-locations: You could put reminders to RC at different locations of the room. For example, if you regularly use the door in the generic room then you could have a monster jumping up and down shouting, "It's a dream! Do a reality check!"

A lucid area: You could treat a specific area of the room as a "lucid area" where you have to go to get lucid. You could pay special attention to that area during recall to reinforce the idea.

A lucid level: Instead of treating a specific area of the room as a lucid-area, you could treat a specific level (altitude) as a the lucid area. You could associate lucidity with events that occur above head height? Or at the ceiling?


Problem:

Of course, all that is meaningless if your sleeping mind doesn't realise that you're in your "generic place" and treats every new location outside or in a room as though it's a new location. It might be worth noting though, that without any conscious intention to apply the "lucid location in generic room" idea I've been paying a lot of attention to specific areas of rooms and buildings in my non-lucids - in particular the far right end of the room, which I've considered as a possible for a "lucid location".