I can appreciate the desire to make everything you do look as good as possible. I'd like it if every game I played looked as good as possible.
But I'm saying that, unless you're one of the handful of studios who can guarantee that your massive budget game will sell 5 million+ copies, you need to be realistic about what your studio can accomplish. It's poor business sense to spend 500 man hours painstakingly modeling and animating this character when you could have something perfectly serviceable in 100 man hours.
I want to be clear though, I'm not saying you should compromise on your vision. I'm saying you should develop your vision with your limitations in mind. That's what the best indie devs do. That's what, say, a film student does.
In a perfect world you would know exactly what you want to make from day 1. The project manager would then say; "okay guyz based on our resources (time/money/staff/talent) we can get this done to X quality in 2 years. OKAY TEAM LETS DO IT! *team roars and gets to work*
After 2 years here is our perfect game.
It most definitely is
not like that. Pre pro on a new IP can take 6-12 months with a small core team. Over the course of its development cycle it will no doubt be altered or completely flipped on its head at least twice. Specifications and rules you set up 18 months ago you now realise don't work for the new scope and you have to brute force all the new content into it because the pipeline is set and it will take 3-6 months to recreate it from scratch.
New ideas are presented, new feature creeps which usually derive from focus testing or publisher/higher up intervention. Ad mountains of work to an already teetering pile of content.
It usually is a chaotic mess. That's why there is always crunch at the end, because at 6-8 months to go, the (I'm drawing a blank here about the right title for this guys job but I think it is) Executive producer will then say; "OKAY! These are exactly the things that will ship on gold." (this is obviously worked out with each department and the project manager)
So now there is a 6 month race to get all the things ticked off the list and first pass QA'ed before lock and final QA testing.
And of course as an artist I'm in the thick of it just trying to make sure I produce the best possible assets with the resources I am given. (resources being time and tech restrictions) If I am given 1 day per prop or a week for a POI I will make sure both get the most I am able to give artistically. Usually this results in a fair bit of overtime.
You also learn very quick how to manage you time and scope. I know in 1 week I can;t make epic mountain of doom, but I'll fucken try and end up with awesome mountain of doom, its not epic but its still awesome..
You can try to plan as best you like for this stuff but things will always fall through the cracks, especially with a new team and a new project. Saying that, it is much easier to manage with smaller teams and smaller games of scope which is why indi games seem to not have these problems as much. But also note that a team of 3 people making a game for the first time, their first attempt will usually be a massive learning curve. How to do things with new engine, how to work together, and by the last 1/4 of the project they will finally be at top production efficiency.
(also note indi cycles aren't usually 2-5 years long, a developer working on the same project for 5 years will have lost more energy at the end of the project than if he was only working for 1 year.)
Hawken is a great example of really experienced guys making something amazing looking with a small team and small scope and smart asset construction.
Every game will have a scope that far exceeds their resources at one point. So much stuff will be cut from a game just because they 'don;t have time' or it wasn't priority 1.