Please see AN1018 for a detailed description of how to use these parts and what sort of sensitivity can be expected.
For a simple on/off switch function as with the Si720x series of parts the distance at which the magnet can be detected depends on the size and construction of the magnet (e.g. Neodynium or Ceramic). As magnetic field drops off exponentially with distance, making the magnet larger from cheap material will probably give more distance for a given magnet cost than using a smaller but more powerful magnetic material. For the small 4x6x10mm neodymium magnets we include with our evaluation kits a distance of 0.5 to 0.75 inches is achievable.
If a sensor such as the Si7210 or Si721x series is used very small amounts of magnet movement can be detected. These type of sensors have better than 11 bit linearity on the 20mT scale (0.02mT linearity) so for example if a magnet is arranged to give +/- 10mT over a range of +/-3mm as in figure 9.2 of AN1018 magnetic movement of 0.006mm (6 microns) can be detected. Note that with the noise of 0.05mT RMS for a single sample, sample averaging must be used to get this level of sensitivity. The offset of 0.25mT maximum would translate to an absolute position error of 0.075mm and the %5 gain accuracy would translate to 5% position accuracy. For these situations, the spacing of the magnet and sensor is critical for absolute accuracy. It is possible to use 2 or more sensors and take a ratio of the fields to null out the magnet to sensor spacing variation and variation in magnetic field of a magnet due to magnetic material variation or temperature variation.
The wheel demo https://www.silabs.com/documents/public/user-guides/ug288-si7200evb.pdf shows an application where wheel angle can be sensed to better than 1 degree resolution and 5 degree absolute accuracy without calibration. This demo uses the ratio of fields from 2 sensors to null out the magnet to sensor spacing variation and variation in magnetic field of a magnet due to magnetic material variation or temperature variation.