Why is Rome the holy city? Why did Rome become the seat of the Pope and the central location for the Church? I would think that Jerusalem would be the first choice. There are also a number of other cities that I would personally pick over Rome because of location and centrality to the early Church. Maybe the issue is that Rome was more central to the early church than I think it was.

I am looking for an answer that discusses the history mostly and the RCC opinion on this.
During the Siege of Jerusalem in 70 AD the city was destroyed almost down to the bedrock with not a stone left atop another, just as Jesus had predicted. Jews were forbidden to enter the city for a long time afterward. This also applied to a small Jewish dissent group called "Christians". This forced everybody (who were alive) to leave Jerusalem and move to the next possible alternative, wherever that was.

Reason 1: St. Peter was in Rome. St. Peter and St. Mark went to Rome to help Christians there. The Catholic Church has always held that Ubi Petrus ibi ecclesia, et ibi ecclesia vita eterna, that is Where there is Peter there is the Church, where there is the Church there is life eternal!. [St Ambrose (d. 397 A.D.), Commentary on the Psalms 40, 30]

So where else can Christians go when they have nowhere else to go? There are plenty of Church Fathers like St. Jerome  (Letters 15:1 [A.D. 396]) and St. Irenaeus who give this as the reason. 

Reason 2: Rome was the largest and most powerful City on Earth. Hence, it was the best possible place to spread the Gospel quickly, as it was the most connected city. Remember "All road leads to Rome".

Reason 3: Pre-existing infrastructure. When the emperor Theodosius I made Christianity the official state religion, all pagan temples in Rome were converted into christian churches which made Rome amicable to the Christian population.

Reason 4: Necessary to full-fill prophecy of Daniel. Some scholars like Dr. Scott Hahn interpret the prophecy in Daniel 7 as Rome to be the fourth kingdom and that Christ was to come, overthrow this kingdom, and establish an everlasting kingdom in its place. This is why the first thirty or so Popes kept coming back to Rome despite being martyred there.

Reason 5: Divine providence. As a Catholic, I personally believe the reason to be divine providence. If the Catholic Church is based in Jerusalem, then there would be unnecessary problems with other faiths which existed then and have come into existence since.