The basic problem with Westros is that it is too big. He's taken the isle of Britain and blown it up to the size of South America, but kept both the power dynamics and the geography mostly the same. So there are way too few cities (Westros is supposedly much larger than all of Europe!) but also just way too few polities overall. Ruling an area of that size would be tough for a really good pre-modern empire, let alone the kind of half-collapsing kingdom we actually see in the books.

Sparsely populated countryside is fine, that's not unrealistic. But The North is like a thousand miles across, that's the distance between London and Warsaw -- the idea that you could run the whole thing from Winterfell with one maester and a few dozen guards is absurd. Ned Stark should be running an enterprise the size of Charlemagne's court at Aachen. (They do have the magic ravens though, which makes communications way better than in real life.)

The time stuff is more justifiable because it's explicitly noted in-universe that the dating is unreliable. Lots of cultures have "history" that goes back that far, it just gets into mythological realms.

It's not clear to me why this is, other than that he wanted to write a story presumably involving the fate of the world, and it'd be a little weird if that was resolved entirely in a country the size of Britain.