There are a few ways I've seen train driving simulators displays things. Polygons are the most common, and there's also a few on less powerful hardware that do sprite scaling (or, on even less powerful hardware, there's imitation sprite scaling). There's also FMV, which I think is most famously used in the Japanese Rail Sim series on 3DS, which use as their graphics actual high quality video footage of real train journeys.
N-Gauge Unten Kibun Game Gatan Goton (which is also listed on some sites as "Hassha Ourai! Gatan Goton") uses FMV, but in a move that possibly makes it the cutest of all train driving games, it places you in the cockpits of various model trains, travelling through actual footage of tiny little model towns with cardboard buildings and little plastic construction workers! Despite the use of models, though, I think it's still working under the conceit that you'r driving a real train, as the cockpits surrounding the window in which the FMV plays are unique to each train, and pretty detailed too. The levers and dials move when they're supposed to, there's a little light that comes one when you're meant to start moving, and so on.
It's all very cute and charming! The game itself is kind of constrained by being what it is. I guess the train enthusiasts who are the target audience for the genre want exactly one thing from these games and one thing alone: to drive a train in as close a manner to driving an actual game as possible. So, just like Densha De Go and SL De Ikou and all the others, you can control acceleration and brakes, and you've got to get to a series of stations along your route, making sure to keep to the speed limits, arrive as close to exactly on time as you can, and to stop at the exact line on the platform at which you're expected. It does have one difference that makes it stand out from the others in the genre, though: it's a lot easier!
Densha De Go, the most famous example of the genre is known for being completely merciless when players don't play completely perfectly. N-Gauge Unten Kibun Game Gatan Goton is a lot more forgiving, though: you can be up to ten seconds late when arriving, and you can go a few metres over the line without getting a game over. Also, on some stages, there's something strange that happens where another train will attach itself to your train and just drive you to the next station, with no input from you necessary. I don't know why this happens, or why you'd put in a part of your game where it essentially just plays itself for part of a stage.
If you've enjoyed literally any other game in this genre, or if you've tried but found them too difficult, then you can probably already figure out if you want to play this one. If not, and you're interested, it's probably a good first game to try out. I've been really enjoying it, and the use of miniatures gives a unique and very appealling look. It's definitely worth your time, I think.