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So, in my town there are a few areas where multiple Pokestops are in your usable radius at once. If some friends and I use a lure module on one each will the effect stack or is that a waste of modules?

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yes

We just tested this. The spawn rate for 1 vs 2 vs 3 had obvious increases. Although due to natural variations, we couldn't tell for sure if it was a linear increase or not, but it looked like each stop had its own increased arrival rate of Pokemon.

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Which also stacks with Incense as well – Robotnik 2 hours ago

Yes. Just can't from a spot with for stops and each with a lure. Each of the stops would generate Pokemon and since there were 4 they kept appearing pretty much non-stop for however long they lasted.

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