You need advice from a few of the World-Builders on here. But you have the right idea.
As well as a performance thing, there is also the Weather, Sound and Imagescapes that you can make different across "regions".
On the performance thing, you are probably correct, but if your world is "just" the city plus a bit of countryside so little will be going on - in comparison to Skyrim - that it probably won't matter whether you do or you don't make a "walled city".
And note, lots of people don't like walled cities and would want your City to be "open" ... there is a mod on the go (maybe it is finished, I've not kept up with its progress) that opens up the existing Skyrim walled cities.
(by the way, massive undertaking, so the very best of luck

)