Where do you think people lived during westward expansion when every town was connected by rail? There weren't too many urban places out there.

It's a myth that it only works for urban areas. Switzerland has their trains travel to basically every town on time and frequently, and those towns in the alps are sure as hell a lot harder to reach than whatever rural place you're thinking of. Admittedly, getting from the station to your destination will be harder without a car until things are built or changed to replace car dependence, but car dependence was manufactured, not intrinsic.