The misses were plausible. A friend of mine once said that nuclear missiles are not designed to be pinpoint accurate. After all, why would you need to be surgically accurate with a weapon that have a huge destructive power and range? Here is an example of a nuclear blast radius of a 500 kiloton nuclear weapon (although the missiles in Fallout would be of lower explosive yield, this illustrates the capability of a nuclear warhead):
http://i.imgur.com/ueyrL76.jpg
If the second warhead do hit Prospect Hill, wouldn't it also affect the Harvard uni vicinity, due to proximity? What is interesting, Harvard uni is likely to be the Institute's territory. Wouldn't that mean that the institute might do something about the warhead before it hit, like Mr. House? They are an organisation with highly advanced technology, after all. They would have access to anti-warhead defence system like what House had installed when the nukes hit...
EDIT: 500 kiloton is the yield of the strongest fission nuclear weapon, the Ivy King. Considering that Ivy King uses fission method, and is detonated in 1952, it would be plausible that the yield of the Chinese warheads in Fallout might be around that, or greater, as we don't know whether they still use the fission method, or the hydrogen system.