Can we file jointly when we live in different cities within the same state due to work arangment?

Yes, you can always file jointly (if you are married, and both agree), even if you live apart for work or other reasons.

If you are in a state that charges city income tax in different cities (Ohio and New York come to mind), you may have issues with double taxation.  Write back with more details.  If you aren't subject to city tax where you live, there won't be any issues with joint filing.

What address should be used in this situation

Wherever you want to receive tax-related mail from the IRS or state government (if they have questions or issues).