There is only one graphical improvement that mattered and that actually pretty much changed the gaming world...
3D
besides that, nothing really maters graphically...
I haven't played collosus yet (on the shelf :/) but the gradual transition of a character can be done with low detailed graphics too.... instead of scars, you put grayer collors and eventually horns...there is always a way to tell a story graphically when there is a minimum degree of detail, but yeah NES graphics are not enough for that... I think somewhere between SNES and PS1 is the spot where graphics improvement stops being usefull to gameplay and is nothing but esthetics.
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