I've heard this Animal Crossing game is quite popular. My daughter has it, she likes it, but she has a friend that obsesses over it.

As for games I've played the closest would be Dragon Quest Builders. It's basically Minecraft with quests and goals. I like it better than Minecraft, but it is still Minecraft as its core.

Oh yes, I love both DQBs, but I am not sure if it counts as simulation.

Yeah, it is kind of its own category.  It's definitely not a management game, but you can definitely build and design a lot of things like you would in many sim games.  That is why I mentioned it.

I think a Simulation game is any sandbox game designed to simulate either high-level or mundane experiences via gameplay mechanics. There are some exclusions, which include strategy games.

Some examples include Microsoft Flight Simulator, SimCity, the Sims, and Story of Seasons. It would not include games like Minecraft (which is not high-level or mundane) and Crusader Kings (which is a high-level sandbox, but a strategy game). Games like Rune Factory and Stardew Valley are Simulation RPGs; and there are other sub genres like Wrestling simulation games.