You've already touched on the major advantages - small equipment (40 foot cars were considered oversize) tight curves, simpler structures and simpler infrastructure (no paved roads, for openers.) The major disadvantage is that this is the realm of scratchbuilders, kitbashers and craftsman-kit builders.
I cheated! I got the same advantages (except for having one paved road) by choosing my prototype and location with care. In the process, I managed to buy most of my run-of-the-yard freight cars RTR, and most of my locomotives were easy to assemble kits. You do have to be willing to think outside of the North American box.
A working knowledge of the railroad's native language is also helpful...
Chuck (modeling Central Japan in September, 1964)
Shorter locos & cars also look a lot better on the 18" to 22" radius curves that a 4x8 limits you to. I have a 4x8 presently, and my Challenger, Veranda Turbine, & 85' passenger cars look a little silly on the curves!!
The only problem with your time period is the limited rolling stock available. Roundhouse/MDC/Athearn is the major maker of freight.passenger cars and locos. Bachmann has also made a few locos. IHC still has a few "old time" structure kits, as well as DPM. There are plenty of craftsman and laser cut kits for the "old west", as well as figures and livestock .Horses & cows are more at home in this time period also!!
~G4
19 Years old, modeling the Cowlitz, Chehalis, and Cascade Railroad of Western Washington in 1927 in 6X6 feet.