I'm not sure why you are experiencing lag in the sims4, I think the sims4 has some problems with freeing up memory in general so maybe that's the issue.
When it comes to open world, I am by no means an expert, but it basically comes down to freeing memory so the game can load other assets. When you load an area in the sims4, the game loads all textures, assets etc. if you have an open world like in the sims3, then the game needs to free assets when you are not in that area. That's why you are noticing textures loading and lagging if you switch from one sim in one place to another sim in another place. That's because the game needs to load those assets again.
GTA5 is a good example on how it works, that game only loads what the player sees around them. So when you switch to another character, the camera zooms out so it can load the assets around the character that you switched to, before zooming in again.
I think it could be possible to have open world in a sims game without lag, but that will require some good programming. The game needs to be good at freeing memory and loading assets without affecting game performance too much.
