A population under 10k is closer to a village than a city. There are towns with a population of 5k that do indeed have their own clinics and even their own train stations as long as they are not located on the side or the top of a mountain, though it is extremely rare for a mountaintop settlement to have a population greater than 3k.
It is honestly baffling to see that people can not fathom that urban sprawl can take shape without suburbanization. You can have houses concentrated into small splotches of land and those are chained together by a singular road and railway. Everything around that is just farmland. That’s just how villages look like in Europe.
Crazy that Koji Kondo got on there before Tezuka, Aonuma and Koizumi, though it most likely helps to have a longer history working for the company than they do.