That's just how this game was always gonna be. The Midgar intro is super dense. Even in the original it takes you all around Midgar, constantly pushing you to the next story bit through different routes in some different part of town. Now this remake has to do that in somewhat more believable, connected & seamless a manner. That simply translates to this kind of more linear experience. The somewhat claustrophobic feel fits the context in a lot of cases. The shantytowns of the slums, sewers, train tunnels & such wouldn't exactly be super spacious IRL either, so it fits that these places would be a bit on the narrow side. I think the scale of the environments makes locales oftem feel a bit bigger than they are, even if the routes through them are fairly linear. Like, I felt that segments like the aftermath of the Bombing mission gave a decent feeling of upper plate town streets, even if you didn't have dozens of city blocks to freely run through but got funneled through specific roads. And some locales have just enough branching paths & room to explore to make them less claustrophobic. It's only been a few points in the game where it felt too limiting (worst being after escaping the church and traversing through the rooftops of the abandoned district with Aeris).
Lol, how is this not a JRPG? JRPG is an (big) umbrella term for all RPGs made in Japan and spans from all the turn-based waifu simulators & pedo bait animu games to more action-y ones like Kingdom Hearts, FFVII Remake and Dark Souls.