But yeah, certainly the more populated areas are extremely English-friendly. My folks in Arkansas probably see more non-English speakers in the average month than I did in Reykjavik.
You're right that Akureyri is not a small town for Iceland, though.
(But then again Google Translate now has World Lens built in - so that helps)
I am curious, does this apply to everyone or only European-looking people?
To the point, I'm neither European nor white and was almost always spoken to in Spanish when in Spain. That may be because of the lower level of English proficiency in Spain, however.
I found that the children in Iceland know English surprisingly well. My children were playing with an 8-year-old Icelandic girl who spoke nearly flawless English. I was impressed.
In small towns like Akureryi, there's a lot of local pressure to keep signs mostly in Icelandic. I was actually surprised by this since there were a lot of English-speaking tourists in the area, but I respect it thoroughly. It's their country, I should learn how to get around.
Oh, as an aside - as someone who is single and still uses the various datings apps, I was also impressed by how idiomatically correct their english was even down to slang and figures of speech. There's clearly a large influence from American media.
If you're travelling to Iceland, take the time to learn a few basic Icelandic phrases - the locals have a lot of pride in their culture and will love you for it.