The resolution issues/jaggies only happen on an HD display. It's a 720x480 native signal. Throw that on a big 1920x1080 display and the image is scaled out and interpolated by a factor of 6. Of course it's going to look jagged, even if you soften the image to zero sharpness.
But display it on a smallish 480p Extended/SDTV and the image will actually look better and cleaner since it's being displayed at native resolution.
I've long accepted and gotten over the fact that Wii graphics just don't look too sharp on an HD display. It's not a big deal; everyone knew from the beginning that it was a SD console.
And yes, it has anti-aliasing. The N64 had anti-aliasing. It's not a big issue.
"Image Processing Function: Fog, Subpixel Anti-aliasing, 8 Hardware Lights, Alpha Blending, Virtual Texture Design, Multi-texturing, Bump Mapping, Environment Mapping, MIP Mapping, Bilinear Filtering, Trilinear Filtering, Ansitropic Filtering, and Real-time Hardware Texture Decompression (S3TC)."
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