It's less about "They would not have used low res bitmaps for displaying graphics" and more about "The artists would likely have arranged the pixels in the bitmaps in different ways"
There are some really interesting articles out there about how the artists for old NES and SNES games designed the sprites to look better with scanlines, and without scanlines (like when playing on modern emulators) everything kind of looks worse than it did when it was rendered on CRTs
Which pixels in Mario them would you move around, exactly, to prevent big square pixels from being really obvious?
Hell, those games didn't really look great on 60" RPTV CRTs either. (For anything other than 4x split-screen, my friends and I always preferred a smaller screen since the big screen exposed all the limitations of the graphics and by the N64 era PC games had advanced to the point that we knew what we were missing.)
And of course anything Mode 7 or full-3D era suffers all the same problems of looking bad blown up to modern display sizes without "CRT optimized sprites" being a factor anymore since the models are seen from all sorts of perspectives and sizes.
They looked better back then because it was new and magical and there were no 4k games to compare against, not because 256 pixels looked more like 1000. Like with VHS vs DVD - it was absolutely easy to tell even on a pretty small CRT.
Look at this video - https://www.youtube.com/watch?v=gNx89J0MBHA - the pixels are perfectly apparent even just viewing it on a laptop screen in a browser on a video from a fairly big CRT.
This seems to suppose a world where, had LCDs been common, people wouldn't have used low-resolution bitmaps. But... there were not a lot of alternative technologies available! There are a few vector-art CRT arcade games out there, but generally very black-and-white/virtual-boy-style, and I believe bitmap graphics even without super-high-resolution would've won out anyway.
This also suggests that you couldn't tell the difference as much between NES/SNES/Playstation resolutions of bitmap-art games, when you DEFINITELY could. The old games never looked "great", it was just the best we had.