statto :
Do You want
1) generate OSM objects realtime ('on-the-fly') from mapsource
2) or save offline converted OSM data to scenery database ?
If 2), it is not possible, as Thorsten said. It is too much gigabytes of informations.
1) should be possible, but You will need C++ or other tools for development fast running executable application. All interpreters are too slow.
I prefer third way - use random buildings with high density, in this case You can obtain reasonable dense city sceneries, but not realistic. This is example :
Wellington
Auckland
or Old Quito (SEQU) :
... compared with reality (more than 10 years old) :
If I remember correctly, density is in the property tree sim/rendering/building-density, I'm using value 3, this is persistent value, not needed set it on all FG start.