Cross gen doesn't hold back racing games especially driving simulators lol. It's not an action/fps game, the level design and mechanics are literally the same as any driving simulator across any gen. All they need to do is to improve graphical fidelity such as resolution, fps, assets and textures, dynamic weather, and more which gives you a next gen Gran Turismo for PS5.
Except cross-gen rules out dynamic weather for online races. Unless PD splits the races.
Actually PD hasn't said anything about dynamic time and weather, maybe this will be the 2nd gen in a row where that's missing. They are adding more weather presets (obsessing over aerosol particles) but what fun is that in endurance races.
The other problem is the penalty system, will we get a serious effort this time or will it continue to promote bad driving behavior. That can be done on the server side so cross gen won't be holding that back, only PD's incompetence in enforcing racing rules.
GT Sport was designed for PS4 and PS5, the detail is already there. PS5 will simply render at higher resolution and lod. However the intention was to get rid of the baked lighting and weather for GT7 and do it real time to get dynamic races. This preview seems to just add more baked in presets. Which makes sense as the ps4 won't be able to handle real time changes.
That's two strikes for me against GT7, but PD can still get me excited if the full game will be playable in PSVR 2.0. It should be possible, it already works on ps4 with 2 cars on track. The ps5 should be enough of a step up to render the rest and up the resolution.