Turan is way bigger than just a significant Hyrkanian tribe. Certainly their roots are Hyrkanian, but they are a massive military power by Conan's time and on the rise under Yezdigerd. Thier prime importance within the game though comes from the number of stories set in and around Turan. With that 'Arabian Nights' feel it's a great area to game in, and for characters to get to Khitai (which is in itself highly unlikely) they most likely have to go through Turan and Hyrkania...
I definitevely agree that Turan is not JUST another Hyrkanian tribe...and definitely Turanians are not just "faux horse-nomads", even if they have nomad roots....
Khitai (at least to my tastes) is just a boring choice, how many Oriental-like rpgs we have seen in these years?....my answer is "too many"...
Turan is a kind of Oriental, but it is more Middle-Eastern and, to me, it results (in REH's stories) from a melting pot of possible infleunces.
As far as I remember Howard never put a story in main Turanian cities as Agraphur itself but the stories are filled references to Turan (much more than references to Cimmeria and Khitai...) and sometimes there are even a few Turanians (see "Peoples of the Black Circles"; "The Devil in Iron" ; "The slithering shadow"; just to not speak of the essay "the Hyborean Age") .
If one looks at the words REH deliberatively uses to describe Turanians and Turanian culture (e.g. "Khan", "Shah", "Satrapy", etc...) it is clear that he certainly mixes Mongolian, Persian and Ottoman-Turkish influences.
Even the "horse-nomad" origins are interesting, especially because scholars (especially those of REH's times in the early 20th century) tend to link those people's origins with central Asia and horse-nomads.
Even the word "Turan" is interesting.
It is an old Persian word from the Avesta but in the early 20th century (Howard's cultural background!) it was believe to be the mythical origin of many central-Asian culture.
See:
http://en.wikipedia.org/wiki/Turan
Therefore REH's mix of so many middle-eastern cultures from Persians to Turks is more than understandable is this sense.
Turan's description can be filled with readings regarding Ottomans, Persians, Tartars, etc... (e.g. the recent novel "My name is Red" by Orhan Pamuk which is a good window on Ottoman culture in the late 1500s).
In this sense Turan WOULD HAVE BEEN A MUCH NEWER AND INTERESTING CHOICE than another boring book on faux, pseudo-China which was never described by Howard.
On the other hand, not only REH mentions quite often Turanians but one can still write a sourcebook on Turan reconstructing the possible origins of the idea of Turan in Howard's mind and culture (see above) and using the informations we have on Ottomans, Persians, Tartars, etc...