I think OP poses a legitimate question, of a living, buzzling world - vs a desolate, wind-swept world. Both can be made in an engaging way, and with NPCs that feel genuine, even if one genre will have 100s of npcs, and the other will have less - or focus less on it.
It is the feelings of a desolate world that brings me to a game like Fallout, even if it's not really desolate. I've thought about it before, that sometimes it's just the knowledge of it - for example
When maneuvering the ruined scenery in FO3, which was nicely designed - would it have been just as charming, if the setting was "Explore a bombed out Sarajevo, watch out for Serb militias"?
It is the knowledge that the world is desolate, informed to you through game lore.