There are many different ways to accomplish a raised rail. I will try to shed some light only referring to the way I have made my tables. When i first started searching for ways to construct a raised rail i looked endlessly for the details of how things were actually done, and found very little details. Asking specific people for help worked well for me. There are a lot of smart creative guys on here and I asked many of them. T_Chan was helpful in every way and still is to this day on anything I ask.
So where do you buy the "strip" that goes around the inner perimeter of the playing surface? Depends on what you want to use. T_Chan sells the suited aluminum diffusers in 8' lengths. He can make them whatever height you want, although 3" is extreme you would have to consult him to see if that is possible. Any other material can be used, all it has to be is flexible enough to bend the curve. I have also used clear acrylic painted on the back side to match the color I want.
I'll use 2 different tables below as examples. Here is the suited diffuser in a 1" raised rail and acrylic in a 3/4" raised rail. I would not want to play on anything taller than 1".
A 3" raised rail will need a what, thin 3 inch by 22 foot strip going around the inside? Is it veneer? Custom or stock printed something? I'm confused here. Again, depends on the construction of the table. My design has a groove where the insert fits into. I have seen other tables where the diffuser is attached to the rail, so it depends on how your table is made, but yes - a thin piece of material the height of your raised rail.
Then there is the outside. The vertical surface on the outside of the rail, about 4 inches high. What do people do here? I can imagine several things. Again, depending on the construction of the table - my table has a base piece which has the outer edge exposed. I edge band it with black melamine and install nails heads, it can be finished however you want. On top of that the rail sits. The rail height will depend on your raised height and the entire outer rail is foamed and vinyled. So, the larger your raised rail the taller this outer rail will be. Hope this makes sense, here are some pics to try and help explain.
Very bottom "base" layer
Rail construction
Rail Assembly upside down, showing how everything is foamed and then upholstered.
I hope this helps.