Rampower, after reading your answer, you made me realize a previous step that I took for granted. You are right, first you have to define de problem to be solved and work out a solution or a set of solutions: "What" have to be "done", with your "machine", and then "How" your machine will make that. Lets say How many HP to be transported, or how many sand has to be moved or water pumped. Then after this "macro" part of the problem has been defined, you go to a 2D or 3D model. I prefer to hand draft on a big paper, because on the same paper I make pertinent stress, speed or whatever calculus, I don’t know how to do that on a computer screen.
Speaking for my experience, very seldom I have needed to use a 3D CAD; we have used it mostly for FEM design or for marketing purposes (to sell the solution to a client). Most times, when we actually make 3D CAD is made because our drafter knows how to do it, he finds it "cute", and he says that it is the only way to work details and to be sure nothing interferes (perhaps he is right about that).
However I disagree with you that spatial understanding is not needed for a physical model design. I think that without a spatial understanding of how things move, and what goes where, it is difficult to design a mechanical solution. It is most possible that you do it intuitively and take it as a normal capability. I have seen guys who just don’t get it, and while they might have a carton, they have lost their time at university. I also have seen people without studies, but with talent, and they make working designs. Their designs might not be so efficient in material use or conception, but they do what they are designed for.
sancat