KidSnide, I didn’t have a lot of time to post last night, so let me expand a bit on my earlier answer. Thank you for including the example from your campaign; that helped me understand better what you’re asking.
In my campaign, the PCs usually go to a place in which I haven't run an adventure before. So, when I fill in all the details, those details are naturally focused towards what I think the PCs will be interested in. Sure, there are details that exist just because I think they would be there, but most of the serious work is focused on "actionable" material that I think the PCs might use. Naturally, this results in game design that is focused on the goals and objectives of the PCs.
There’s no way I can detail every hovel, town, and port in a setting, so I detail some of the major areas and use my knowledge of the setting to improvise the rest as needed. I make no specific effort to tailor my improvisation toward the adventurers; it’s up to the players to take what they find and make something of it.
I’m going to take your example of the adventurer’s traveling to Huzzuz and translate it into something from
my own campaign setting. Let’s say that, for whatever reason, the adventurers are part of the royal entourage of the newly married Queen of England, Henriette Marie, and her brother, Gaston, the duc d’Anjou, traveling from Paris to Boulogne where the new queen will depart for her new home.
I’ve spent a fair amount of effort detailing
Paris, but I have only a couple of scattered notes on Boulogne. Boulogne itself is divided into the High Town, which is the old medieval walled city, and Low Town, which is the quayside community along the river Liane. There’s also an inn known as the "Sword of Henri the Great."
In terms of general knowledge of the setting, Boulogne is one of the French Channel ports, and there are many features in common between Boulogne, Calais, Rouen, Honfleur, and others. All of the ports are home to fishermen, many of whom travel as far as New France for their catch. The ports are also part of the network of commerce in the North and Baltic Seas; each town will include a variety of foreign traders, mostly English, Dutch, Flemish, and Danish, with the occasional Venetian or Hansa merchant as well. Pirates shelter in the French Channel ports, paying large bribes to the city father and royal governors to do so, and they often become privateers when France goes to war; they in turn are stalked by privateers from other countries. As sailors tend to come from many different countries, all of the port communities tend to be a polyglot mix, and as with most of these communities, crime is a problem, from street gangs to smugglers. Foreign spies abound, watching pirates, merchants, and the tiny French royal fleet. The local nobility rules the different ports as aldermen and magistrates, often in conjunction with a royal governor; most royal officials are despised by the local bourgeoisie as greedy and corrupt. However, a royal visit, such as that of the new Queen of England and the prince who is first in line for the throne should Louis Treize die, is a big deal; there will be attempts to curry favor with the queen, the duke, and the swarm of French and English dignitaries and courtiers who make up the royal entourage.
So I have an idea of what to expect in Boulogne, based on my background knowledge of the Channel ports. Next I’ll pull out the random encounter tables in the core rules, roll up a number of generic encounters and skin them with the details I know for the Channel port communities. A generic rogue or rowdy might become pirates or smugglers, a generic noble a member of the local aristocracy or a courtier traveling with the royal entourage, a bureaucrat a hated royal tax collector or the Admiralty lieutenant for the port. Each gets an agenda; the smugglers want to avoid contact with anyone as they prepare to smuggle silk to England, the local alderman is looking for someone to make an introduction to M. de Villeauxclercs, the foreign minister, and so on and so on.
And that’s it. The adventurers may make an enemy of a pirate captain or friends with a crew of smugglers. They may gain an ally among the local gentry, or earn the enmity of a magistrate. Who they contact may lead to other encounters; for example, making an ally of a pirate might earn the adventurers attention from a Flemish merchant spying for the Spanish.
To summarize, I take what I know of the setting and the genre, generate random-based encounters, and fit them to the time, place, and circumstances. My focus is on what makes sense in terms of the setting rather than what the adventurers are interested in, because it is up to the adventurers to make use of the setting, not for me to make the setting useful to them. The players and their characters drive the game forward, not me.