That's not stupid, stop & think of what it would cost to have a machine (PC, X-BOX or PS2) that could support a game w/
enough cars to accurately depict the diversity in cars alone. The .IMG file (File that all the game models are kept in) alone for SA is 896 meg (VI, unedited). Adding the accessories would ease that burden & at least give the illusion of more
cars. The same could be done w/ peds through clothing options, color of clothes, hair color & length. hats, etc...
The only example of this I've seen so far in GTA is a few cars that showed up as convertibles.
As for the clustering (The game calling up the same model in groups around the player), we'll have to wait for the game to come out to see if they actually fix the problem.