In fact you do and they can.
Finding IP Addresses - Identify The IP Address of An Email Sender
Oh, and another thing.
The only people who will get remotely near to properly tracing an IP are law enforcement with a court order (and even then it's not guaranteed to get them anywhere fast, especially in the world of botnets).
Public databases are notoriously hit and miss in terms of accuracy. Also, in relation to ISPs with private customers, you'll frequently find public data is obfuscated (cf. Data Protection legislation) and the locations shown are probably just some ISP offices.