Yes, the French pronoun y does mean “there” as in a place. It can also replace an indirect object. The difference is what type of indirect object you are referring to. The y only replaces an indirect object that is not a person.
A pronoun is a word that replaces a noun, so you don’t have to use the noun over and over again. An indirect object is a person or thing that receives the action of the verb. You can use y instead of à plus the noun, as long as you are talking about an object and not a person. The COI, on the other hand, is only used with the indirect object is a person.
While the y , meaning there does not correlate to a pronoun in the English language since the English word there is an adverb, it is, nonetheless, considered a pronoun in French because it replaces a noun, specifically a noun in a prepositional phrase. For example,
Je vais a la gare demain. [I am going to the train station] can be rewritten as
J'y vais demain. [I am going there tomorrow]
If the pronoun y replaces indirect objects, it does so for the same reason: Indirect objects in French are always expressed with to --thus, they are prepositional phrases containing, of course, nouns. This grammatical structure is unlike English in which to is understood. But, it is indeed consistent in Franch grammar to consider the use of y as a pronoun replacing indirect objects because they, too, are part of prepositional phrases.
Compare these sentences:
I am giving Louise the key. [ the preposition to is understood, but not written]
Je donne a [meaning to] Louise la cle. [I am giving to Louise the key.] (there is a grave accent over the a and over the e of cle--Sorry I don't know how to insert) This a means "to" and cannot be omitted as in English. So, the prepositional phrase is always intact.