this post was submitted on 07 Oct 2023
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I'm going to preface this with this computer will last quite a while, but you won't have nearly as much of an upgrade path if you went with an AM5 platform (latest AMD CPU socket) on DDR5 (latest generation of RAM). With that said, your use case seems to be one that will not require keeping up with the latest games, so if you want to save some money this is what I would do.
NOTE: Prices are from Amazon, you can likely find a few components cheaper elsewhere.
CPU: You don't need an R5 7600. I was running an R5 3600 up until a few months ago and the only reason I upgraded was I found a 5800X3D for a good price. I'd go for an R5 5600X which is $60 cheaper than the 7600 and will be more than enough for City Skylines 2
Motherboard: You can now get a B450DS3H board for that CPU for $40 cheaper
RAM: You'll now be on DDR4. Get a 16GB kit of CL16 DDR4, will be about the same price as the DDR5 you have. May want to go for 32GB of RAM because sim games eat RAM, but ultimately up to you. You can always buy more down the road if needed as a 32GB kit is like $5 less than 2 16GB kits.
Case: The no-name brand cases on Amazon are actually quite good. You can get a nice case for ~$50. Hell, I just found a Thermaltake Versa H18 for that price. Another $55 saved.
GPU: I haven't kept up to date on GPUs, but I've heard good things about the 6700XT, and benchmarks look respectable for BG3 and City Skylines 2. You could likely get away with something a bit less powerful, but price to performance seems to side with the 6700XT.
This brings the price down to $831. You could ditch the aftermarket cooler and get it under $800 as the 5600X comes with a cooler, but I'm never going to knock aftermarket coolers as they tend to be much quieter and less whiny than stock.
I also went down the "is AM4 still good?" Rabitthole and decided because I don't have a Microcenter near me, I could not get a 5800X3D, so I didn't want to build it. After watching many videos though, AM4 is a mature platform and so thoroughly developed. Sales are on fantastic products, and the GPU and RAM will remain upgradeable for years, just that upgrading the CPU would require a new MOBO as well. Building AM5, seems OP already knows a great deal, but the news is that it can be finicky and returning products because they don't work so well is more common than usual.
I think in this case AM4 is fine. I recommended it because OP mentioned the price was a bit much, and AM4 at the moment gets you a lot of value. Especially given they are someone who plays indie games primarily with some heavier games occasionally and isn't on all the latest AAA games. I'm actually very similar to them where I'll play the occasional AAA game, but I mainly stick to Minecraft and KSP (which is stupid CPU intensive). My R5 3600 was more than enough for this and my upgrade was 100% unnecessary, so the 5600X should last them quite a while. There is also a decent upgrade path from a 5600X to a 5800X3D or 5900X3D.
We're starting to see gaps between generations get smaller as Moore's law fails, so I think parts are going to start lasting a bit longer now anyway. Hell, my 4970k lasted me almost 7 years, and my mom ran it in her work PC I built her for another 3 after that.
I honestly don't think either path is a bad one, just up to them if they want to save some money or get a little bit more upgradability.
Excellent points.