And I am pretty sure F5 has been the lowest selling game of the series. I am not positive, but I know the sales have not been doing that well. It is also the lowest rated game of the series. So clearly removing the majority of the cars and tracks is not the answer.
That's not necessarily the case, because GT3.
And anyway, the opposite is hardly true either, GT6 is the lowest selling and rated GT, and that has the most tracks and cars of anything.
I think it's a lose:lose. You simply cannot win for that first game on a new system. Either you cut content and get hammered for it (the GT3 model), or port content and get hammered for it (the GT5 model). Bar something weird happening like GT3 turning into the best selling GT ever, which I suspect was an outlier due to a bunch of weird stuff going on.
The difference comes later on. In the second game on the new system, the GT3 model with all new content will be building back up to good levels of content, and high quality content at that. The advantages of having all high level assets start to become clear. You end up with a game like GT4, debatably the high point of all Gran Turismos.
In the second game on the new system the GT5 model runs into the same problem that they had with the first. However much high quality content they put in, they're still going to be pummelled for including old assets. You end up with a game like GT6, debatably the low point of all Gran Turismos.
The problem now is that they're on the back foot. Usually that second game on a system is the one that really establishes the power of the brand, so they can afford to suck up the hit with a slightly underwhelming first game on the next system. Polyphony have fluffed that, they're underwhelming right now and they need the first game on the new system to be a massive hit to undo the damage they've done to the brand with GT5 and GT6.
Sadly, that's not one of the options. I think it's doable though, they're not light on content really. They have ~400 premium cars (yes, less if you count them like a normal person). They *should* be able to make a couple hundred more between now and the release of GT7. ~500-600 cars is very, very high, if the list is well selected. See the car list for FM4 for examples.
If I was them, I'd stick to premium content only and go really, really hard on blockbuster features. The game needs a course maker and it needs to be AWESOME. It needs the world's most robust and diverse online ecosystem. It needs an entirely new paradigm for single player that makes everyone sit up and take notice. It needs something that has never been seen in a racing game before that will make it walk off the shelves because people just have to try it.
They're never going to wow people with what can be done with 15 year old assets. The way out is forward, not by doubling down on what worked in the past.