Does the 3 months in state residence rule for naturalization require physical presence?

The residency requirement that you reference requires that the Applicant:

*Have lived within the state, or USCIS district with jurisdiction over the applicant’s place of residence, for at least 3 months prior to the date of filing the application*

As long as the Applicant can document proof of residence for at least 3 months prior to filing, he should satisfy the requirement.