Regardless of whether cities are above ground or below, arcological or traditional, they can either be comfortable or not. Apartments could be the size of 50-foot high football fields or arm-length closets and they could still be good or bad. The holodecks can make tiny spaces whole valleys. That image from Things to Come still looks claustrophobic to me. It can go either way.
Regarding the idea that "I 'know' a window is fake" means little if I can look out it and see NO different than the real thing and smell the honeysuckle on the warm air breezing in through it. Imagine living in a place where you wouldn't know you were indoors if someone didn't tell you. It's a sinister thought only if you assume the classic sci-fi threat of not being able to leave. Hell, would it matter if the window was real or not if when you stepped through it, a transporter took you to the location it showed?