When there are multiple players, mobs can spawn within the given distance of any of them. However, hostile mobs (and some others) that move farther than 128 blocks from the nearest player despawn instantly, so the mob spawning area is more-or-less limited to spheres with a radius of 128 blocks, centered at each player.

At what distance do mobs spawn?

Natural mob spawns happen within 15 x 15 chunks around the player, or 240 x 240 blocks. Multiple players will have their own spawning area, so mobs will spawn within the distance relative to each player.

How far away do mobs spawn vertically?

The distances for mob spawning are based on 3 dimensional geometry, so no mobs will spawn (other than via monster spawners) within 24 blocks of you in any direction.