That depends on the engine, as I'll explain below.
Newsflash - no amount of budget for software development can overcome hardware limitations! There's 512 MBs RAM to be used for all textures, scenery and cars. You couldn't spend a trillion dollars and get GT5 running on a PS2!
I don't think you understand engine limitations. You can create a game engine that works to provide fabulous detail as the player travels along a set route, but can't provide freedom of movement, or you can provide a game that allows the player to turn and move anywhere, but will need to pair back on the image quality to fit more in at any given moment. You can create a racing engine that supports 16 highly detailed cars and limited scenery, or a racing game that allocates more of the finite console hardware to creating prettier scenery and reduce the car fidelty. That's where the compromise comes in. AFAICS all GT5's scenery is simple geometry with a texture or three slapped on it. In towns this looks okay as the buildings are basically collections of textured boxes, but nature looks rough when modelled this way. To make dull, flat tracks like TTGT more convincing would need a different scenery model using layered, transparent geometry etc., and that's not how GT5 is set up. PD would basically have to write a different rendering engine for natural scenery tracks that supports long grass and more detailed trees and such, or give up some of their car shader performance for give less realistic cars and spend those shader cycles on making more realistic terrain.
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Another absolutely atrocious screen from GT5. I really don't believe that a AAA title can have such bad looking scenery - they should have budgeted for some level of track detail - even if it was mediocre. It hardly seems sensible to have photorealistic cars paired with environments from two generations ago, I mean look at NFS:HP2 the cars look fantastic, amazing shaders, come quite close to matching GT5 in gameplay and the draw distance is 15 km - now surely GT5 will not be able to compete since it's running at 60fps but it shouldn't have so big a disparity in visuals.
And here you will definitely be able to notice the PS1 quality low res 2D foliage as it is directly in the foreground and not in the background like other pics:
I also noticed that not only do they tend to use 2D tree sprites, it's often the SAME 2d tree sprite repeated over and over again
And in this screen, the Eiger Nordland track looks exactly like it did back in GT HD, replete with pathethic 2D mountains, nothing like the bump mapped mountains you get in Forza :
What is exactly the difference between how car lighting and shadowing (and reflections) is done in GT5 vs Forza 3? Is it primarily due to better tech better or artistry? IIRC GT5 Prologue did environment reflections by projecting the road surface texture on the car's exterior, does GT5 still do this?
And Forza use what? Different? Just try to compare Nurburgring where there are many different trees in every corner. Even drivers sometimes talked that they can recognize turns by the types trees near to them. Now look at the screen from GT 5 and FM 3, in FM 3 You have 3-4 types of trees reused on most tracks, in GT 5 You have high res sprites that are photos from real track sections.
