I recently had a flight from Valencia to London, going through Düsseldorf, cancelled. According to EU regulations there are different levels of compensation for flights below and above 1500 km in distance. I assume that this distance refers to start and end airport regardless of connection. Is this the case? I haven't found a proper definition online. Here, it would make a difference as VLC to LHR is around 1350 km, but the complete itinerary is above the 1500 km threshold.
Yes, the relevant distance is the straight line (that is, the "great-circle distance") directly from your point of departure to your final destination.
This was ruled by the European Court of Justice in Bossen v Brussels Airlines from 2017.