They're always depicted like this in media. Is it a simplification?
This is clearly an oversimplification and inaccurate. Except in those cases where it is accurate. Population size and geography drove the layout of communities. There are a lot of mountain mining towns that were hemmed into a gorge and there wasn't enough room for anything besides a road and two rows of structures - one on either side. And there were communities that clung to one or both sides of a road with too few people to justify another row of structures even with the geography was more accommodating. At the same time, other communities had the population and a terrain that could accommodate a more sprawling community.
One of driving forces that kept communities tight, with structures close together and people living in close proximity, was the fact that most people did not own horses (in spite of the cliché one sees in movies). People had to be able to walk to stores and work from home - and back again, so that kept people living close together. Apartment buildings or living in floors above a commercial establishment was common.
Horses were a sign of affluence or of the need to own (and feed) this sort of tool. Teamsters had them, but most miners didn't.
edit: I should have mentioned a source: John Reps, Cities of the American West (1979) is a great source on this. I deal with the issues of horse ownership and community planning in Virginia City: Secrets of a Western Past (Nebraska, 2012).
Sorry you were downvoted in your response. Once you read past my quip at the beginning, I hope there was enough for you to sink your teeth into. If you need more explanation, don't hesitate to ask.