I agree that a voxel engine is probably more productive for such a "toy" console approach. You can basically use the same techniques as the one you'd use on the PICO-8, just with an added dimension.
Polygonal 3D is a huge step compared to 2D engines. You can't just create assets with a simple bitmap editor, you need to learn 3D modeling and it's a huge can of worm. And then you need to learn to animate your models...
With voxels you can just sculpt your models minecraft-style, it's a lot more intuitive I think. And animations could be done like for sprites: you just key your animations with different 3D voxel models.
That looks cool, but I think what GP wants is a PS1-like virtual console with limited palette, 32x32 textures, and unlit, unfiltered, non-projective texture mapping.
PS1 can support 256x256 truecolor (or 4bpp/8bpp paletted) textures, dithering and gouraud shading! It also has a very weird graphic pipeline that I don't think would be very friendly to a novice: the 3D projections are done on the CPU and the depth buffering is handled by... the DMA. The GPU is purely 2D, hence the lack of perspective correction in the texture mapping.
The Pico-8, in both its aesthetic and its imposed constraints, creates a "fantasy version" of the experience of working on actual 8-bit consoles. It presents that era as people remember it, instead of as it actually was. I think a similar thing could be done for the N64 generation.
As others here said, while this is cool, it uses voxels which are unrelated to the techniques used in early 3D video games. Not much nostalgia value there.
You can use modern modeling tools with self-imposed limits on model complexity and texture sizes. (Blender is even era-appropriate — its first public release was in 1998.)
Alternatively, see Crocotile3D, which approaches that era's aesthetic from a different angle of simplified tile-based modeling: http://www.crocotile3d.com/
Polygonal 3D is a huge step compared to 2D engines. You can't just create assets with a simple bitmap editor, you need to learn 3D modeling and it's a huge can of worm. And then you need to learn to animate your models...
With voxels you can just sculpt your models minecraft-style, it's a lot more intuitive I think. And animations could be done like for sprites: you just key your animations with different 3D voxel models.