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A town with 1k-20k people is perfectly viable for a train stop and having an hourly train connect these smaller places with the next larger city.
I agree. But the problem is not to connect a small town with the larger one, is to connect the small town with the next small one where maybe there is the mall, or the other one where there is the school (higher level) or other services you need.
The point is that normally you have a relatively good connection to the big city of the area, but the connections between the small towns around it are patchy, that is what make you drive to the next small town instead of using the train or bus.