Internally, the game is rendered at 792p/900p "natively". Then the XB1's scalers upscales the image to 1080p and outputs that to your display/TV. Upscaling take makes duplicates of pixels and places then next to pixels to make the image bigger eg. 900p to 1080p. This slightly blurs the image a bit. The more upscaling you need to do the blurrier the image will be. The XB1 scalers also adds or increases contrast of the output image, this reduces the blurred/softer look of the image due to the upscaling (and some will say makes its picture look more vibrant) but a downside to this is crushed blacks on the image.
Why? Every image you see on your screen is made up of pixels. Every pixel has a memory footprint and render time. The less pixels you have to render on screen, the faster you can output your pixels (framerate) and the less memory the image takes up.
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