No they did it with triangles I'm quite certain. Virtual On is a perfect example.

Yes, the Saturn hardware was designed for quad-based rendering instead of triangle-based. This was great for 2D games (since sprites generally are textures on large squares anyway), but not so much for 3D where triangles have been, as of 2009 still *are* and probably always *will* be the de facto standard of the industry.

That's not to say 3D on the console was impossible - it's very possible to make 3D games with quads, especially if you design around that limitation. Most designers hadn't designed around that limitation, and given the various problems the Saturn had, didn't see the need to.