"I'm confused then. So widescreen with videogames is completely different than widescreen film, where there's more picture showing?
If the game is widescreen, doesn't it have to render more, since it's not stretched?"
well there's image aspect ratio and pixel aspect ratio.
If a game were to run 640x480 for traditionnal TVs and then be programmed to run at 852x480 for widescreen, then that's image aspect ratio, and there are indeed more pixels being rendered.
On the other hand,n if you run 960x540 (as it is assumed in the case of GT4) for a 4:3 TV, and then basically just alter the FOV in the renderer to a wider field and stretch the image to a 16:9 ratio, that's pixel aspect ratio, and in reality, the same amount of pixels are being drawn. it's just that, if you can imagine, you're now pushing out rectangular pixels instead of normal square ones, wich results in a rectangular (16:9) image.
"Do they even make 4:3 - 1280x720 displays?"
1280x720 isn't 4:3 btw.