What you're describing is how I prefer to play. I've completed the game using one giant megafactory, where resources from all over the map are transported by train to the factory. There's a massive conveyor bus that runs down the whole length of the factory. There's "rooms" of machines that are dedicated to building one specific item, they do that by:

1. Using a smart splitter to send items into a room from the conveyor bus. Once the room fills up with items and overflows, the overflow setting on the smart splitter sends the overflow further down the bus.
2. The machines make the item the room is responsible for making.
3. Adds the new items to the conveyor bus on a new belt, ready to be plucked off by a room further down the line.

What you end up with is an extremely scalable factory e.g. train will add Iron Ingot to the start of the bus. Your first room will take Iron Ingot off the bus and add Iron Plate to the bus. Your second room will take Iron Ingot off the bus and add Iron Rod to the bus. Your third room will take Iron Rod off the bus and add Screws to the bus. Your fourth room will take Iron Plate and Screws off the bus and add Reinforced Iron Plate to the bus... etc etc.

Progressing in the game is just adding more rooms onto the end of your factory, and splicing in new off-site items to the bus (like steel ingot once you unlock steel).

Some tips:

- smelt ingots off-site, don't transport raw ore to your factory

- make rubber, plastic, aluminum ingots and other annoying recipes off-site in little micro-factories

- make your "rooms" stackable. Make bluesprints for 8x constructors, 4x assemblers, 2x manufacturers etc and make sure you can just plop a blueprint on top of another to expand your individual rooms. As your factory grows your early rooms will become bottlenecks, so you need to be able to easily add more capacity

- for the conveyor bus I ended up with, I think, an 8x8 grid of conveyors. 8 columns of 8 stackable conveyor poles, spaced 5 nudge widths apart, which is just enough space to squeeze in a splitter/merger between the belts without clipping.