Way too early to say which actually looks better. There is barely any FM footage to make a comparison. 

What? Do you mean the polygon count? I'm pretty sure that they won't--higher poly counts aren't really going to raise graphical fidelity for cars much anymore. I'm sure that they'll be slightly higher than GT Sport (mainly on small things like badges/tires/other small details/etc.). The effort is mainly going to be going into lightning systems, textures, and environments. 

After the first 12 hours I pitted and left the game game on pause for 7 hours while I slept, got up the next morning grabbed a coffee for breakfast and prayed that nothing glitched overnight , the gods were kind and it was fine  apart from high beam light shining 10 metres in the air into the treetops rather than the road and the overall weakness of headlights that you pointed out with your Nordschleife experience.

 I lied I have another complaint its tyre wear I noticed that for some reason the competing AI cars tyres lasted a lot longer in campaign mode, even with me on hard tyres, in one way it gave a challenge by having to do around I'm guessing here 20 /25% percent more stops with all the extra associated in out time lost adding up, still  the tyre wear algorithm should have been better, maybe they needed that advantage because I noticed watch bits on replay there seemed to be a bit of a desync between tyres and refueling meaning the AI would occasionally pit a few laps after a tyre change for a fuel top up.

Going by the past, gt has always gone for more photo realism, and with the gt sport engine tech made to be future proof and taken advantage of future hardware, I don't see that trend changing. I was looking at the forza 8 trailer, even though work in progress,  it looked to follow the style of forza 7.  What I noticed was cars and track detail not as great as gt.

They didn't exist yet! (Was talking about GT5)

It's great in GT Sport, and amazing in HDR. The difference is that on SDR you can get blinded by dust/dirt kicked up by the player in front of you. The headlights illuminating the dust can make it hard to see the road. In HDR you have a higher brightness range and can look through the dust without it hiding the track beyond. And the Nordschleife looks great at night. (But only static lighting, in GT5 it got dark and light again)

Not in GT Sport, tire strategy works there. It depends of how you drive and of course which tire compound you chose. If you tear up softs you'll have to pit more often than the AI, yet if you drive smooth on hard tires you can beat the AI simply by pitting less. (You can always beat the AI in Gt Sport, you need to drive a less powerful / lower class car to get any kind of competition. The 'fun' was finding out how much of a bonus you could get for using a lower class car and still win)

The AI in GT Sport got smarter with pit stops and don't all do the same. Tire wear also plays a major strategy in online races where your driving style really matters. It's also different depending on the car and drive train and what brake balance you set. The only complaint I have is that wheel users are at an advantage there. It's much easier to conserve tires with wheel and brake pedal input than on a controller. Plus it's also some form of damage. When you get punted off into the gravel your tires get extra wear as well, putting you at a disadvantage for the rest of the race. Next to having dirty tires for a bit giving you much less grip for a couple corners. (Which works great. When your opponent in front goes wide through the grass he will have a bit less grip for the following corners and you have a chance to make a pass by out cornering them)

Anyway, if PD would dial up the speed of the AI, they would be quite competitive. Hopefully they don't set it to 'every one can win' mode again.

And draw distance plus LOD pop in. It's still there in GT Sport if you look for it. Signs popping in, even buildings in the far distance. There is also a visible LOD change in car detail when they get closer but harder to spot.

The main effort is going to be in reflections, shadows and particle effects. And those are all part of the lighting system as well. Plus more 'interactivity' with track objects, better physics in collisions with track objects. (Pretty silly when a little cone launches a car in the air!)

Plus more effort in online physics is needed. GT Sport often has weird looking collisions due to lag. You don't actually collide with other cars on your system, you see the result of the collision of your car with your opponent as it happened on their console. GT Sport uses forward prediction, the more lag between you and an opponent, the more 'displaced' your cars are on each others console.

So even if your opponent behind you brakes on time, that event might reach you too late and your opponents car on your console runs into you from behind, you get bumped forward (likely now not making the corner anymore) On their screen they never touched you and see your car suddenly jump forward.

It's still the better option than doing the entire race on the server which means everyone has input lag. They it is set up in GT Sport is that you have real time control of your car without any fluctuations, yet that means all other cars have to be forward predicted to stay in sync with you. This can easily be several car lengths when playing against someone from thousands of miles away. More fine tuning is needed in how collisions are handled to avoid the exaggerated 'hammer' effect with lag. Playing against South America from Canada can easily mean 200ms of round trip data difference or more.

In single player you of course don't have to deal with that. Yet there PD made AI cars very 'heavy'. You can't bash them around as much as online opponents, and are too easy to use as 'brakes' and corner 'aids'.  Which is probably why people are so terrible at racing when they get online. The single player allows far too much bad driving. Even encourages it as 'diving' into the corner is nearly always rewarded in single player. The AI simply gets out of your way.

Which is another area PD really needs to work on. The penalty system online, implementing actual racing rules. Atm it's far too simple. If contact -> look who came out worse -> penalize other car. Since 'who came out worse' is often 'calculated' as who loses speed, the perp usually gets away with ramming you.

There are still a lot of improvements possible!

I agree with the cross-gen argument. While GPU limitations can be easily resolved by the next-gen hardware without affecting the gameplay, CPU limitations are different. You need to build the game around the inferior system as it simply doesn't scale linearly with a better CPU. Those limitations affect core gameplay, game logic, physics, AI, object positioning etc. All of this is important and it's even more important in a sim like GT. If only PS4 had a semi decent CPU. Unfortunately, in this case we're talking about anaemic Jaguar CPU, which was already meh at launch, almost a decade ago. 

There were someone putting the regards of the CPU use of a simulator and that he doesn`t expect it to be a problem for the crossgen, but sure I do agree that it is a potential to hold the game down, unless they do 2 versions (what I doubt).

Where cross-gen will hold it back is the amount of cars on track. It being cross-gen rules out multi-class endurance events with 200 cars on track. The yearly Nurburgring 24 hour race won't be possible if it has to keep parity with the ps4 version. The PS5 should be able to handle AI for 200 cars, ps4 likely can't. GT Sport already had a bit of trouble with 20 car standing race starts. (Fine with rolling starts, but too many cars too close together had fps dips, on ps4 pro)

My ultimate race: 24 hours, 200 cars, multi-class, dynamic time + weather, perhaps with shifts for online (co-op taking turns) or save and continue in the pit for off-line, will likely have to wait until next gen or next next gen. One day it will come! 100 player battle royale is standard nowadays, time for racing to catch up!