This question may come across like a generic/broad question but it is very specific. TL;DR how does a game like SimTower smoothly animate and keep track of what seems like thousands of items being simulated at once.

Often a game like this shows what looks like hundreds/thousands of rooms with elevators with what looks like hundreds (or thousands?) of people. And this game was made in 1994!
I've always wondered what approach games is used for games like SimTower to make an enormous world that exists beyond the screen while simulating it all keeping the frame-rate high.

1. I assume we only render what is on the screen but do we constantly simulate everything that is off the screen?
2. Does it really keep track of each individual person/room/elevator etc in the tower and where they are going in each update loop? I can't imagine how you would write an efficient program to do that while keeping the game running smooth. 
3. Assuming a typical game update loop where you would loop through each person/room state/elevator state etc. How do they do it?

I've been searching for this type of answer for a long time and I just can't seem to find out how it is done. 

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  [1]: https://i.sstatic.net/u6mAH.jpg