Akureyri isn't really a "small town" by Icelandic standards though. Once you get into the actual small towns over on the eastern side of the country for example, English proficiency is much, much lower.
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.
Mind you as a tourist you’re going to be bumping into far more fluent locals than you might in day to day life otherwise. I’ve lived here for seven years and whilst I work in English and live in downtown Reykjavík I still meet a not unsubstantial number of Icelanders who are not comfortable with English. Mostly those 50+ but still some a generation younger. English speaking is definitely nearly ubiquitous in younger generations though.
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.