My Phone was stolen and find my iPhone says my phone is offline

in the span of 3-4 hours tracking on find my iPhone shows that my device is offline

There are one or more reasons why the phone is showing as "Offline"

• The battery has run down
• The phone was powered off
• The phone does not have an Internet connection where it is currently located

There may be another reason as well. Thieves are very fond of placing a stolen phone in a special type of bag that will not allow the phone to either send or receive a signal.

Unfortunately, there is no way that you can control any of these things. All that you can really do is keep checking every 3-4 hours or so to see if the status of the phone might have changed.

I doubt the thief had any access to my iCloud password or passcode

There is no way that anyone could ever guess your passcode in less than 10 tries before the phone locks out. No way that anyone would have your iCloud password unless you gave it to them.

I was wondering if a normal inexperienced thief can factory reset my phone without having access to any of my passwords

No. Even an experienced thief can't reset the phone.

I was also wondering if tracking on find my iPhone works even if the SIM card was removed

The phone could still report on its current location if it has a good Wi-Fi Internet connection. But, since the thief would have no way to get into the settings to select a Wi-Fi network, you can pretty much discard that possibility.

or if the phone is turned off.

Newer model iPhones will still send out an intermittent Bluetooth signal when they are powered off.....assuming the battery is good.....but there would have to be another iPhone in very close proximity to the stolen phone to pick up the signal. So, while this is theoretically possible for the phone to report on its location for awhile, it is rare that this ever works.

Of course the thief can prevent any chance of the phone communicating on its location by placing the phone in a special bag like we already mentioned. Thieves strongly prefer this method.

Be very careful if you receive a message or email from "Apple" or "Apple Service" stating that your phone has been found and you just need to provide a bit more information.....like your Apple ID and Password.....so the phone can be returned to you. These are always scams trying to get your log on info. Be careful. You don't want to give out the keys to the kingdom.

There are several things a thief can do to prevent tracking. The easiest one is to put it in a Faraday shielded bag→https://www.amazon.com/s?k=faraday+bag, which any self-respecting thief carries. They can also remove the SIM card if it isn't an eSIM, wrap it in aluminum foil, put it in Airplane mode if you have Control Center on lock screen enabled, or turn it off.

The Find My Network will still work if the phone is turned off or if the SIM is removed, as it is crowd-sourced.

But in general you will not recover a stolen phone. Even if you could track it, what would you do? Confront the thief? People have been murdered doing that.

Beware of a common phishing scam: You may get a text or email from “Apple” or “Apple Security” (or sometimes “Police”) saying your phone has been found and to click on a link to see its location. This is NEVER from Apple or from law enforcement; it is from the thief or fence to steal your Apple ID and identity. Delete any such message without responding to it. Apple never gets involved in lost or stolen devices→Avoid phishing emails, fake ‘virus‘ alerts, phony support calls, and other scams

And here is guidance from Apple→If your iPhone, iPad, or iPod touch is lost or stolen - Apple Support