> The other extreme, where you can go inside everywhere, turns out to be boring

But that's the point! Daggerfall is like this too: huge areas (both cities and landscapes) with nothing interesting in them. That's what makes them feel so lived in. They're not worlds designed for the player to conquer, they're worlds that exist independent of the player, and the player is just one of a million characters in it.

The fact that I pass by 150 boring buildings in a city before I get to the one I care about both mirrors reality and makes the reward for finding the correct building all the greater!