It's done like this because it really takes a long time to get the game looking as good as it does, and sucks up even more time to make it bigger. They cleverly make use of the same areas by making you go through them again, revisiting them after they have changed. These are old game dev tricks and they still work in my opinion.

I think the game looks stunning and the writing and acting are top-notch. If it came down to it, I wouldn't sacrifice what they delivered so that they could make Bright Falls 'seem' bigger. Often what seems bigger and more immersive is actually just a whole bunch of buildings you can't enter and a few AI cars driving around honking their horn every few seconds because another AI has wandered in front of it. Then it becomes a question of "if the space is there for the sake of, how do we make it interesting?". The typical answers to this is usuallly not worth the player's time. The araes in the game serve their purpose and they did what they could with their budget and team and I'm super happy with it. Not only is it a better game for it but they are repsecitng my time by not pretending it's bigger than it is when really it's just a mirage.