The N64 did have some restrictions to itself to limit what could be done though some devs were given access to the microcode and a few others actually wrote their own. I don't exactly know how that part works but BOSS studios was one of them and anyone that played World Driver Championship knew they could do things others were not with N64. In reference to the Wii, this more or less refers to the tools that Nintendo has published vs the range of middleware tools out there. Currently Nintendo has the best tools but once a few companies get some good time with the machine, they'll release some middleware that will visually stomp what we see today. Eiji Aonuma recently said Twilight princess was the tip of the iceberg because it was simply a GC game with basically no Wii code at all, controller aside, and that the next Zelda title will show a vast improvement all around possibly including elements like full orchestral score and not just graphical updates.
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