This one was a bit all over the place. I figure i'll give my own account of what we use minis for an go from there.
Its madness to go down the rabbit hole of always trying to depict every scene with accurate minis and terrain. Thais taking one side to its extremes and most people wouldn't try to do that. There will always be a need for some kind of substitution or abstraction. I saw a post about a guy who had spent $13,000 on his mini and terrain collection and i'm sure even he can't get every scene exact.
Minis for my group save time and confusion. When we started playing 3.5 in 2007 all we had were some old solid color red and blue dnd minis from some unknown used set and that was enough.
Over 10 years we've stockpiled about 60 prepainted minis. Before that we used dice or 1" cardboard circles with painted images on them. There are a lot of cheaper options now. Lots of unpainted 28mm minis work great as well. We've used the same 5 or 6 minis to represent PCs for all our games. The only thing we've tried to get accurate is size. Tall guy gets the tall mini, halfling gets the shorter one.
Here's a list of what i use. a white dry erase mat with 1" squares and 6 different colored markers, a mix of painted and unpainted 28mm minis, and six 3" x 3" x 1-1/2" wooden blocks. I use these for everything. A quick city gate, giant monsters, quickly put them under the mat to represent a hill or valley, wagons, and damn near anything else.
Anything more detailed than that and it slows the game down with me trying to set it up. Even in RP situations its always nice to have the minis on the board, draw a quick scene sketch (20 seconds or less), and then everyone's on the same page at a glance.