I think "art-direction" in the case of Gran Turismo 4 is better named "passion".
I think where many developers simply concentrate on a simple thing (i.e. the cars) and slap simple textures onto buildings, Polyphony went through the effort to get it to look right, believable. Certainly this takes time and a lot of effort.... and it also needs passion and the necessary motivation. Gran Turismo 4 offers a brilliant package - I'd say great game engine combined with the right effort to make it look good too.
For the fun of it, we could do some math and figure out what exactly is needed to be calculated every single frame (lets assume a 120 framerate per second for physics) to show how complex a 'realistic' racer such as GT4 can become...
Lets start with fixed attributes for each car that would have an influence of how it drives (of course, not all fixed attributes would be used to be calculated each frame, but we can use this to figure out what would need to be later on each frame):
[m] = mass of the car (i.e. 920Kg)
[W] = Power (i.e. 260Kw)
[c] = Friction Force Constant for tires (various values for slip / durance)
[a] = Acceleration... althought this one would vary depending on RPM of engine / Nm etc
.......
variable values would include...
downforce, weight distribution (depending on cornering, accelerating, braking), tire heat/usage, speed, a/de-cceleration, surface grip, surface angle, engine power [F] at x RPM, selected gear, wind [F], cornering etc etc...
just some ideas of what is actually calculated...