Clipping vs Routing Issues

I feel like a lot of people don't understand how incredibly hard coding a game is, let alone a game like the sims. Even though it feels like video games have been around forever, they haven't. Video games are fairly new and even though games have been improving in a rapid speed, we aren't completely there yet. We can't do everything yet, be it because of hardware or software limitations.
I'm no expert of video game development (yet, don't worry, I'm working on it), but I think the game everyone is begging for maybe simply can't be made yet. There is a reason why The Sims doesn't have a competitor and that might be because a Sims game is mighty difficult to make
I'm not saying that this whole clipping this is the best solution, because it's not. It looks sloppy and pretty ugly. But I can't imagine 'just making the sims step aside and squeeze next to each other' is as easy as it sounds.
I personally prefer enjoyable gameplay over perfect graphics, and I feel like the majority of game developers agree. A game can look amazing and perfect but if it's annoying to play it's just a waste of everyone's time.
I'm sorry if not all my sentences make sense I'm running on just a little bit of sleep.