I could see the contrusction workers actually working, moving vans with families, kids boarding coming out of the house, boarding the school bus (actually walking/climbing), going to the school, playing on the swings, the sand, the slides, people actually walking in the park, a car actually owned by a sim being parked at work, etc. SC5 is praised for this level of detail in its model.
Except that workers did not go to the same job every day, nor did they return to the same house when they were done. No sim has a history; every move was to the first available location that an invisible "seeker" agent found. So, by not having history, more agents had to be used in order to find available locations. Not to mention that water and electricity were basically implemented as "wandering" agents that just randomly walked the grid and "deposited" at every location they passed until depleted. Which, in turn, meant even more agents, because they had to be populous enough that the random walking would ensure visiting the entire grid.
TL;DR: There were a lot of decisions SimCity made that directly increased the number of agents required. This in turn directly impacted the #1 issue about the game: City size.
Take a look at Caesar 3. It's "only" hand-drawn, high-resolution 2D, but the amount of detail is impressive. People enter the map carrying their belongings on hand-drawn carts, erect tents, go to work, walk around on the streets, the building slowly grow all the way up to small palaces… or a mob with torches and pitchforks assembles and razes everything, only to be mauled by the local amphitheatre's lions (or wild wolves). Kids run through the streets, food is carried from the farms to the silos, to markets, to homes, …
It's similar for other games of the time, like Settlers II. Only in the 2000s the detail level was massively cut down.
Games like Pharoah (a direct descendant of the Caesar series) also had agent modeling in the late 90's where you could see what the agents were doing. That said, the computing power and storage capacities of the time limited the set of possible animations. The LOD and graphics are incremental improvements on a feature that has existed for decades (not to say they aren't welcome improvements).
The art department just makes things pretty. They don't have much to do with the simulations folks, aside from being asked for assets for specific actions (car driving, person walking, etc).
SC5 might have been really pretty, but the agent simulation was entry level CS at best. As others have noted, sims woke up and drove to the closest available job regardless of past behavior for example.
I could see the contrusction workers actually working, moving vans with families, kids boarding coming out of the house, boarding the school bus (actually walking/climbing), going to the school, playing on the swings, the sand, the slides, people actually walking in the park, a car actually owned by a sim being parked at work, etc. SC5 is praised for this level of detail in its model.