Yeah, it's the area south of Pittsburgh near WV, why is it called Pennsyltucky instead of Pennsylvirginia? No idea.
But, it's more of a "here be hillbillies" thing, especially when compared to the rest of the state.
Not just the area south - basically all the area in between the two cities. And yeah, it's basically like saying "once you're out of the cities, you might as well be in Kentucky."