Google could install a Stadia data center in every block of every city and town on Earth, at least any where there is a Stadia customer. Some version of this is the only way to reduce latency significantly.
In a more realistic version, it is exactly what Netflix does - they pay to have Netflix streaming servers running in local ISP centers in much of the world where there are Netflix customers.
Sure, but the solution helps with both (bandwidth because they only need to stream data once over the internet to each data center, not once for every client connected to that datacenter; and latency because there are fewer hops between client and content source).
An infinitely-resourced online play service could pay to install machines that run the games the same way Netflix pays to install their streaming boxes, and would care about both latency and bandwidth (since more bandwidth => better resolution video).
In a more realistic version, it is exactly what Netflix does - they pay to have Netflix streaming servers running in local ISP centers in much of the world where there are Netflix customers.