Yes, this thread turned into a very interesting tutorial about gear design.
As far as our models go, most (if not all) of the current mass-produced N scale models use plastic (POM, aka. Celcon or Delrin) injection molded gears, so no hobbing takes place. Those gears are as good as the mold design. The only metal part of the gear train is the brass worm, and sometimes those are plastic too.