The detector could emit a beep when it detects the object.
I would use a small 27M.XXXXHz crystal oscillator for the transmitter (both legal and safe).
For the receiver I'd use a super heterodyne with an crystal IF oscillator, just above or below the transmitter frequency and a tone decoder circuit to latch on to the beat frequency and indicate when the transmitter has been detected.
My suggestion would have been well and truly overkill, just for 5ft a simple tuned receiver with sufficient amplification to turn on a transistor and make a piezo buzzer go beep will do.
I recommend that you consider using a much lower frequency. When you go down to around 2 MHz the likelihood of signals bouncing around is much reduced and so it is easier to control your range. The circuit for the transmitter has to be shielded, and I recommend using a short monopole for the transmitter, where you roughly tune the length of the antenna to get the shorter range that you want.
the receiver does not need to be fancy or extremely sensitive.
Loopsticks have a deep-null when at right angles to each other. That would provide a simplistic RDF, but might be undesirable, depending on the OP's use model. Example is the avalanche rescue system called Peeps. Peeps works on very VLF.
Yes indeed. Magnetic coupling can be very effective at 2 MHz as well, but all the way down to 100Khz is feasible. It is very easy to make a transmitter at those frequencies too. But using a loop antenna will make the transmitter quite directional which may work against the goals of the op.
No, no FM transmitter coverage could be fix limited, because it is depend on power, ambient noise, topology, receiver performance, and many more.
If a range detector needed, it must be a dual band ultrasonic or something.
Magnetic coupling is acheived by picking an antenna that has strong emission of magnetic field and weak emissions of electric fields. The classic first choice for this is the loop antenna. The literature often divides this category into SMALL loop antenna and LARGE loop antenna, where small means that the total diameter is much less than one wavelength (for example, less than .15 wavelengths) at your frequency of operation. So, start by googling the keywords "small loop antenna", since you won't want to use a large loop antenna at these lower frequencies. The rest of the transmitter is no different than you might use with any other antenna.