The FFXV large setpiece battles (of which we've only seen titan so far) aren't exactly new, but the fact that they exist in an open world is why they're so neat.
In God of War 3 for example, the scale of giant setpiece battles are limited only to that specific setpiece. But in FFXV, at least judging from Ramuh, the flying car, and the height you can get to in the Platinum Demo citadel, the scale exists everywhere. So it's not unreasonable from a technical level to be running around in a city, then fight a giant boss in that city that uses the city as a setpiece. It is pretty impressive. I'm really wondering how far they'll take it. But if the hand is all there is to the Titan fight, i'm really not that surprised.
Being able to fighting an unrestrained Titan himself not only wouldn't make sense in the plot of the story (seeing as summoned titan is RUNNING and throwing boulders), but would be really hard to actually do. This isn't Kingdom Hearts, Noctis WILL die if he falls too far, he can't fly, and aerial attacks aren't free of resources.
They COULD do that kind of fight, where it's just tiny Noctis vs. a creature the size of Titan. But i imagine it would require the player to have mastered warp points and resource management.