I think almost every bit of Final Fantasy VIII is meant to feel...

I think almost every bit of Final Fantasy VIII is meant to feel bigger than its predecessor, and the town you visit during the exam is huge compared to almost any town in VII. It does work, for the most part, because you do get the sense that the town is larger than the areas you're allowed to explore. It also makes sense that you can only explore certain parts, because the town is under attack.

I also don't think it's an accident that the towns in VIII all feel like old European cities, full of café's, bridges, hills, cobblestone, and sweeping, beautiful vistas. It feels like the kind of world where every youth is busy studying in a school, while soldiers pine for singers.