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The best way for tram or bus routes depend upon your aim with those routes. Inhabitants do not need your buses or trams to get anywhere within the town. In 20-minutes tile they can walk across town without problem. So, what do you want to accomplish with your bus/tram routes. For lines within a city:
1 – Gaining money – Circular route are quite efficient, minimal upkeep and working fine until automobile cloggs up all streets. Frequent stops are fine, but do not overdo.
2 – Get them to the station – radial straight lines from the station to strategic points in town work best. Key is fast travel from those key points to station without delay. Just a very few stops on the line are enough. the goal is to get as many people as fast as possible to the trains, so they can travel farther, and thus make more money with trains.
Combining both strategies is fine, and will do well until automobile takes over.
But the big money bringers are the town to town lines. Place one stop in each town centre, and setup up a bus (or tram) line between the two stops. Guaranteed big profits, even with stage coaches in the early game. I use typically 20 stage coaches per city-to-city line, and make 100K to 300K per year per line. Easy win.