Well actually, sort of.

Here is the street plan of the city just a few years before in the late 1870's. What is very notable is that by that point though AC already had multiple rail lines running from Philadelphia and other points to the island.

However even the 1880's were a bit before the true peak period of the Jersey Shore as THE summer destination for Philadelphia society in particular that far South but New York as well. The 1890's would really see explosions in tourism, but it also was the apex of a continual buildup over the past two decades.

Compared though to neighboring communities Atlantic City was still much more developed. To the south Ventnor and Margate were sparsely residential at best and only slowly became absorbed into AC's growth. Its something you could even see standout in the show itself. IIRC Eli at one point moves his family to the edge of town and basically down undeveloped beach, while Jimmy also is on the border of what we might consider Atlantic City(which is strictly speaking just the top 1/3 of one of a series of barrier islands running along the coast) though this could also have been Brigantine which was a small island that was eventually carved off by an inlet from AC itself and was then bordered on its other end through an inlet by Long Beach Island. Certainly the depictions of "Piney" life that Nucky and Eli had growing up were in broad strokes relatively on to what life on the mainland was like in the Pine Barrens. Composed mostly of fishers and baymen they were the small original year round population that provided the manual labor to keep the original health clubs and hunting lodges running that began the trend of vacationing on the shore. Indeed their boats were also the original methods of travel across the various bays to the islands and back. By the 1880's while lucrative fishing, clamming, and importing remained a staple of the economy increasingly all were being overshadowed by larger markets. While other homegrown industries such as the bog iron forge nearby at Batsto were failing, and cranberry cultivation was still in its infancy. It really was a matter of support tourism and resort development or die out for the population.

But yes AC while not a 2 street town by any means(the original boardwalk and rail line came in the 1870's) it was certainly not a metropolis.

But compared say to Beach Haven to the north on Long Beach Island it was already the most built up of the shore towns. LBI would host a whole series of shore communities of repute and some fame like Beach Haven, Surf City, Harvey Cedars, and Barnegat Light. But still would never have more than a single rail line, and despite major developments like the beautiful original Engleside Hotel, the island would always be overshadowed by its more raucous neighbor.

So yes in the 1880's Atlantic City was already a growing and known shore resort, and would host 100ks per year. There was still growth to happen but the transformation of the Jersey Shore into resort communities was well underway by the mid 1880's.

A wonderful book that focuses slightly North of AC but absolutely makes some references is Eighteen Miles of History on Long Beach Island by John Bailey Lloyd(though his other book Six Miles at Sea is nice as well). He has unfortunately since passed by many years ago when working on my Eagle Scout service project I met with his widow who was a partner in his research and she was a huge help and was kind enough to give me a signed copy of it.