Your first example wouldn't work, unless you put in "go ahead until you reach the traffic light" But otherwise yes, you can use it for such purposes

Yes, 'until' refers only to time. For example, Andrew's example, '... until you reach the traffic lights' is about time, because it means 'until (the moment that) you reach the traffic lights.' Likewise, 'walk until you see the church' is fine, because this is about time also. It means 'walk until (the moment that) you see the church. If you are only talking about distance you can't use 'until'. Using 'until' for distance is a very common non-native mistake, even for advanced learners. The phrases you need to talk about distance are 'up to' or 'as far as'. For example: Go up to the traffic lights. Go straight on as far as the traffic lights. NB Are you sure that the shop is 'in front of the church'? Or do you mean 'opposite'? This is another common mistake.

Time and distance.