Note: If anyone that actually knows how ICBMs works wants to chime in, feel free.
Not quite.
Esthar has closed its borders, we have no information on what's on the ground We know where the capital city is, roughly. We don't know what's on the ground at any given point inside it.
We can (somewhat) precisely target specific points (It's not 0% it's minimum), but we don't know what we're aiming at. That specific point could be anything, the presidential palace, a vacant lot, a landfill, a river. But we can reasonably assume this point is somewhere within the city limits.
We have many targets. We can target the same place with multiple missiles precisely, but we don't know what it's hitting, and it could easily be a useless target, and therefore we waste many missiles.
We can individually target each missile in a different spot, but this is actual genuine rocket science we're talking, so it's difficult and complicated, which means it takes time and money, and since we don't know where the valuable targets are, you're not any more likely to precisely target something valuable, and your engineers are spending time they could be using on something else. Also, it's slower, which means less missile launches.
Or, we can do the targeting once, but widen the error ratio. So you only need to set one target point somewhere in the centre of the target area, and you know the missiles will hit somewhere in the vicinity of that point, mostly likely each somewhere different. So you only have to set the target once, but will actually hit many different places in the general area. Saves much time and effort, and money and achieves pretty much the same thing.
Because you have no information about what's on the ground, other than 'this is probably a city', your precisely chosen points are still random guesses, you have no idea what you're aiming at. So bombing a wide spread in the area without specifically targeting each missile achieves the same thing, except you only have to set the targeting once, so it's quicker, easier, and cheaper. Which means you can do more of it, or at least spend that money somewhere else in the war effort.
Option A: Precisely target each missile to unknown points within city. No idea what the points will hit.
Option B: Target somewhere vaguely central, increase error ratio. Each missile hits somewhere different, unknown points within city. Only need to set target once to strike many different places. Same result as A, but quicker, easier, cheaper.