Does Kubernetes internal networking keep traffic to co-located Pods where possible?
This looks to be answered on offcail docs here

NodeLocal DNSCache improves Cluster DNS performance by running a dns caching agent on cluster nodes as a DaemonSet.
With this architecture, Pods will reach out to the dns caching agent running on the same node, thereby avoiding iptables DNAT rules and connection tracking.
Having a local cache will help improve the latency.


Image Reference : https://kubernetes.io/docs/tasks/administer-cluster/nodelocaldns/#architecture-diagram