Do you know any technical details about why the worlds can't be made seamless?

I don't know the technical details but I know that when you attempt to add new map area to any existing map (for example the overworld) the physics engine does not engage for those spaces. You have to create new map areas for anything new.

There are also hardcoded limits to the number of entities that can be loaded in-engine at any one time. When you go over the alotted number of NPCs for example it starts spawning them in the sky, this causes the infamous flying horse bug everyone has seen in modded Skyrim when they've added too many new NPCs to zones. I think newer games have had some bandaids slapped on the engine to increase this but it's still there.

Open Cities works because the cell already exists, so they just took everything in the city zone and moved it into the existing world cell, which is identical in size. So there's no problem with this causing issues. This can't be done for a lot of buildings (to create interior/exterior) because of various issues such as NPCs not knowing where their house is unless it's a defined place you go through a loading screen on, so taking houses and slapping them into open world would completely break scripting for their daily routines, same for every building in the game. Some of them are tardis design too, bigger on the inside than the actual building is on the outside.