That is correct, albeit an oversimplification. There are indeed games that create fully playable worlds, especially procedurally generated play spaces. This includes No Man's Sky as well as a more recent and more known example. However, do not mistake a skybox and playable geometry together. These games too have skyboxes. No game ever actually renders far away objects. A simpler example is draw distance in open world games. They use the same concept. Go far away enough and the system renders out the actual existence of an object and replaces it with a texture file instead, as all systems have a physical limit and cannot process "infinity" that is universe. Move far away enough, and you'll even see the texture itself disappear.
But it is great that you mentioned this! It means I can get into how the Cardinal System functions and how it generates content, although unless there is additional interest, I'll try to keep it short, since I feel it's a big tangent for this thread.
Cardinal System does not relentlessly create. It is an incredibly efficient moderation/sustainability system that oversees a game world. It only creates when it is told to or when it needs to adapt to unforeseen events. As an example, I will use Sword Art Online Progressive 2, Concerto of Black and White, the Floor 3 story of Aincrad. The creation in this case is not an object, but an entire questline. Floor 3 features the beginning of the Elf War Campaign that spans almost a dozen floors. You start the quest by encountering a Dark Elf and a Forest Elf fighting each other. You pick a side to fight the other and in the end, the quest is designed so that the NPC you are protecting, sacrifices themselves to save you. However, Kirito and Asuna unexpectedly manage to save Kizmel before she can sacrifice herself, throwing the entire questline out of the window, which puts Cardinal in a position to adapt to the new circumstances. Kizmel does not respond as if she's frozen for a couple seconds and suddenly starts reacting to things much more realistically than an NPC ever would, so she would continue the quest by generating solutions to the now should-be-broken questline. This occurrence is explained much later in the series, in the Cordial Chords side story, where Eiji explains the 3 layers of Cardinal's language engine tiers, where we finally understand what Cardinal did was to bump up Kizmel to a higher layer for her to adapt and create content on the go.
We know for a fact from Higa and Kikuoka's statements is that they have created a very limited simulation, consisting of
only the map we see in Volume 15, Alicization Invading. Kikuoka and Higa explain their scope of creation back in Volume 10, Alicization Running. The entire map of what they have created is what Underworld consists of at their creation, surrounded by impassably large walls. In the hundreds of years long history of Underworld, not even Integrity Knights were able to fly over this wall with their dragons. However, once Dragon Jets are discovered and Underworlders manage to fly over this wall, Cardinal has to adapt to the unforeseen circumstances and thus it generates content beyond the wall, a vast whiteness devoid of anything. Similarly, when the jets reach the space, much like the Divine Beasts on the ground, it now creates Divine Beasts in space too, because any place people have reached requires content to play. And so it goes. Until there is need for content, Cardinal creates no content. Until people actually manage to reach other stars, there is no reason for those stars to exist thus Cardinal won't actually create them.
It actually does. Not sure which portion you read but it literally says "between stars and planetary systems", it specifically uses the plural form. A single Planetary System refers to planets orbiting around a star,
according to Wikipedia. "Between planetary systems" means you need to travel from the orbit of one star that planets rotate around, into another system where other planets rotate around another star.
