I'm aware that localized reduction of fat it largely a myth and that I'll have to really lose weight if I want to get rid of my belly.
However, if the muscles in the belly are tighter, wouldn't that reduce my belly?
It may reduce the appearance of your stomach, but you have not actually done anything to reduce it. The vacuum exercise is the primary way to work the transverse abdominus, which is the most interior of the abdominal muscles. It is primarily responsible for holding in the viscera (intestines).
If the TVA is not in shape, then it will allow more protrusion than if it is toned and fit, but this is ONLY a visual effect, it has nothing to do with the actual amount of fat present in the abdominal area.