If the 720p game doesn't upscale its content on a 1080p TV, it will run natively at 720p on the TV, therefore not use up all of the pixels (it won't just "stretch" automatically without a scaler). Video scalers are there to make non-1080p signals fill up the screen, otherwise there will be unused pixels. It doesn't just make it look better and crisp. I've ran Wii in 480p native resolution (without upscaling) on my 1080p TV, and only the 854 x 480 resolution is showing, the rest of the pixels are in black. Here's a definition:

Upscaling is a process that mathematically matches the pixel count of the output of a standard or non-hi-def signal (such as standard DVD) to the physical pixel count on an HDTV or video projector, which is typically 1280x720 (720p) or 1920x1080 (1080i or 1080p)

http://hometheater.about.com/od/hometheaterglossary/g/upscalingdef.htm

No, actually it will look a little bit more blurry on a 1080p screen then on a 720p screen. Upscaling from 720p to 1080p every pixel needs to cover 1.5 pixels on the target display. You can either do it by resampling, which will soften the image, or by duplicating every other pixel, which will highlight aliasing and give an uneven picture.
It would be nice if there actually was an option to play with black borders, native 720p on a 1080p screen.

Some TVs have a "full pixel" option which will run anything in its native resolution (well my TV does). While it's nice to see everything look nice and sharp, it's kinda strange with so much empty space on the TV screens. It's hard to play Wii games in native 480p without upscaling. 

The game looks great IMO....

Ah, my tv only offers full pixel with 1080p content. It also upscales lower res content beyond 1.5x magnification, as in it introduces over scan. The Wii had some huge pixels on that screen, while Wii games on WiiU have small black bars in full pixel (1080p) mode. Maybe the WiiU doubles the Wii 480p to 960p, looks about the same as choosing doubling for DVD resolution on PS3.

Best solution, get a 4K screen :) Triple every 720p pixel or double every 1080p pixel to get a perfect match for both.
(However you would need a 8K screen to also get 480p at a whole number, 9 x 480p = 4320p)
It doesn't help developers are introducing 900p this gen, bye bye native resolution display.

This article might help.

http://furiousfanboys.com/2013/11/the-gaming-press-is-lying-to-you-about-resolutiongate/

^

Why does the articla say that 2,073,600 pixels is only 50% more than 921,600 pixels? It requires more than double the processing power which is why most 1080p games run at half the fps.

It sure is!

Certainly. And if you take a look at the pictures posted by myself and by FFXIII, you will find just such instances of the color brown in Nintendo's titles.

The problem isn't the presence of colors, it's the exclusion of colors. I don't agree with Soundwave's original assertion that 90% of developers focus solely on browns and greys in their games, but it's likely that he was exaggerating, and there's a hint of truth to what he says. For at least the first half of the previous generation, there was an overabundance of games set in brown and grey environments, where even the grass, the sky, the blood seemed tinted brown.

Nintendo, for what it's worth, tends to utilize the whole spectrum. They don't tint their sky or their blood green, that's for sure (except in very special circumstances).