When do you use words like 市 instead of 都市 or 説 instead of 学説? Are they just more general forms? If 都市 has already been used, do you use 市 almost like a pronoun?

There's no general rule.
市 as し is rarely used, 都市 is preferred, although 市 as いち shows up some. 市 as し is usually a suffix.
説 -is- more general as it happens, and is used sometimes in place of 解説 but I think not so often in place of 学説 even though it carries both meanings. (Though that pattern may reflect my reading choices rather than usage patterns.)

You didn't mention it, but 話 carries meanings of all of 相談、会話 and 話題 and perhaps more, but the sound is totally different, much like the difference between the English 'talk' or 'story' vs. words like 'consultation', 'conversation'.
I mention this example because many kanji have a single-character kun reading that is more natural and conversational, compared to on-reading compound words that may sound more literary.
If you use conversational words too much in formal writing you sound uneducated, and if you use literary terms too much in conversation or casual writing then you sound stiff or pompous.

I would say, don't think of them as one and two kanji versions of the same word that can be used in place of each other with some overarching rule that exists to determine which one to use in each situation - just think of them as different words. Whether to use 市 or 都市 and whether to use 説 or 学説 are not related questions, just like whether to use ごめん or すみません and whether to use 星 or 惑星 are not related.

context.... they're not the same.

The number of characters in a word doesn't have much to do with when it's used. To learn how to use words, reading and listening to native materials would be useful.