Well, even at this point in history, Central Europe wasn’t hugely developed. By the mid 1300s, a fair amount of the forests had been cleared for use, but it would only be around 1500 or so where the amount of new land became difficult to find and old baronies started becoming smaller. By the 1600s the process was pretty much complete.
Holy Roman Empire was a bit strange, as there were a number of quasi independent republics (often city states) and theocracies within. Sometimes tensions flared, particularly when the Holy Roman Empire desired to exercise more control over the Imperial Free Cities, but most were governed to some extent by nobility of some station - and overthrowing a lord was fairly rare. Stratification in the HRE was a bit complex, and even historians alive during that period had a difficult time figuring it out. Nevertheless, it did exist.
And, yes - I’m not sure that the stratification of society is depicted well in the game, particularly as it’s hard to determine why you’re calling everyone “sir”, and have to really dig to find out what titles they might actually hold. All the nobles appear to be the same rank in conversation, which is not the case. As far as Henry can tell, everyone is either a peasant, or a “sir”, when in reality it was more complex than that - and people were quite aware of the social stations of others.