I agree, the improvements will be in resolution, lighting, LOD's, loading speeds of objects etc. The car and track models themselves are about as good as they can be, maybe higher LOD's and tweaks here and there, but there's very little need to push more polygons around a scene. In terms of what was possible in GT Sport as opposed to GT7, of course GT Sport on PS4 couldn't manage the same level of detail and lighting as GT7 is doing.
Real time reflections and reflections of reflections is a big deal for graphical fidelity, especially at high resolutions. I beleive the reflectsions are 1080p in the GT7 footage we've seen so far. That's pretty good and GT Sport certainly owuldn't be able to push close to 30fps doing that on PS4, let alone 60fps.
People will always compare pictures based on agendas and trolling, but nothing I have seen so far looks as good as GT7. People may be able to isolate a few assets in a single scene or shot and say "ha look, that's blurry, this other games got better graphics" but anyone can do that with any game. I can take shots of FF7 that make is look woeful if I focus on the weakest graphical parts, when the reality is that other than those few parts and in motion the game looks fantastic.
I think there was an expectation by some that we would see a big graphical leap when we moved into the next gen, but there's a reason all the build up has been around SSD's, Ray Tracing and other technical differences that will improve graphical effects, gameplay and level design over pushing more polygons. I have not seen a single next gen game that has completley blown my socks off graphically in the same way previous gen upgrades have. But when you compare a next gen game direclty with a current gen game onyour own TV I think the differences will be far more obvious with them being more focused on resolution, lighting and effects..