I'm kind of "late", but here I am anyway.
The idea of having a true 5th gen 3D Sonic game is definitely an interesting idea, it probably would have helped the SEGA Saturn hit the "10 millions units sold" milestone. Sure, it's a small boost of debatable effectiveness.
Considering that the release year is 1997, I see that the game and the console could have had a significant impact (introducing Sonic for the Japanese audience, defining SEGA's mascot, it's almost like a soft reboot, for the game) on Japan's market only. "Why?", you may ask. It was the only region that still had a bit of momentum going there. On the contrary, it might be challenging to break through the walls that Sony has built in North America with the PS1. But I believe there's a way to diminish those walls at least.
"Aggressive Marketing" accompanied by a reduction in the console's price, and bundling the game with the console (just like the Genesis). Imagine other iconic moments we could have received if the game existed. If things had gone more smoothly, we could stretch it to having new cartoons made for Sonic. God knows what would happen with the Dreamcast if things went that way.
But sadly, misfortune snuck up, causing the American and Japanese branches of SEGA to have complications. And the rest is history.
Here's a bonus: the closest thing we can use to visualize that game is through the 3D hub world like you mentioned (being a hologram, plus there are zones waiting to be unlocked) or SRB2, it's a fan-made game that somewhat fits SEGA 32X/Saturn aesthetic.
(Yeah, I drifted from the main topic. But I hope you enjoyed your time reading this.)