I think the loading time was due to the
extreme levels of compression going on - we're talking 64k remember! And yes, the scenes were abstract and meaningless.
But there's no reason why similar principles of maths can't be applied to generate a landscape, city streets, network of caverns, racetrack (perhaps this is pushing it a bit far

), and so on. Especially if you follow the theory that the world around us is based around fractals and chaos theory (don't ask me to explain either of these things

).
Probably the best approach would be something like that used by the aforementioned Midwinter games - taking a mathematically generated world and allowing the level designers to manually place the gameplay elements within it. This ensures that the world retains a large scale while not appearing too sterile/computer generated, and also keeps the data storage size down.