Seeing cars and jetskis drive by and Nancy Landgraab and the Bjorgensens in modern clothes would definitely break the immersion for me. There are a few secluded lots here and there, maybe if you don't mind having your medieval lots spread in several different neighbourhoods, it could work. That being said, Old town in Windenburg has beautiful bell chimes sound effects, I think that would be a nice setting and it needs few adjustments if you want to play a medieval city. Henford is a good choice too, especially in the countryside area.