If one has an adequate model, as I had at my disposal in the mid-80's using HILO, the simulation was a timing simulation of the behavior of the MCU as derived from specifications and physical modeling.

If one buys adequate tools, which I certainly have never done, one can model nearly anything.

HILO simulated a microprocessor, e.g. a Motorola 68010 in a memory subsystem, which it also modeled in the same way, including ROM and RAM and other features, e.g. I/O logic, etc.

Several manufacturers provided "physical modelers" which recorded and analyzed the actual behavior of a subject component and, when combined with adequate specifications, could turn out pretty good models for subsequent simulation.

Code was "loaded" into the memory array and the simulation proceeded, often with very helpful results.

RE