I don't believe for a second that XC2 being cel-shaded has anything to do with the hardware, and like Ck1x said, the original was plenty anime. If they wanted, they could have made all the models look like Shulk's from Smash 4 and it would look fine.

Nintendo makes everything that art-style. It's not a concession. It's what they do. GTAV, TLoU, and MGSV all run on (presumably) weaker hardware. If Nintendo wanted to make graphically impressive looking games on the Switch, they'd have no problems doing it. They just don't want to.

I know they could, my line of thinking leans more toward budget cuts than actual tech, as you said, the Wii and Wii U were able to pull it off.

At this point I'm not entirely sure of the point you are trying to make! You are ready to judge a system and it's abilities off of the limited games we have seen in development. No one is expecting a portable XbOne or PS4 so what's your argument?

Are you trying to say that Nintendo cut corners some where? Where would they have gotten this readily available powerful SoC from to use in their device for a reasonable price?

If you know anything about technology point to another device that is packed with as much as the Switch for the same price. The device is definitely worth $300, now you or other people may not see that and that's okay. But I don't think we need to minimize what the Switch is doing for portable gaming, forget what Nintendo says this system is definitely the successor to the 3ds as well. 

Honestly, I like the theory that Xenoblade 2 was originally Monolith's 3DS game, and it transitioned to Switch development (being replaced by Xenoblade Chronicles 3D.) That is probably why there was a transition to a cell-shaded art-style, and since art assets are expensive to produce they just stuck with them. 

I agree.
It's surprising how well some Gamecube titles hold up when Emulated on the PC.
The art-style in Luigi's Mansion a game released a decade and half ago has aged pretty well all things considered.

Could it be that they actually want their games to feel unique and interesting and not realistic and boring? Shocking

Xenoblade WAS the thing that felt unique on the Nintendo console. It's more like you go to Mc Donald's because you love their burgers, but they also had the Mac Rib sandwich which comes out every now and again and is like the best thing on the planet. Then you go one time and they said they have a new take on the Mc Rib and it turns out it's just a hamburger with barbaque sauce on it. (Keep in mind, just an example. I hate Mc Donald's and the Mc Rib)

Your statement would also imply that Xenoblade and X were not interesting or unique and that they were boring. Well I'll just say that statement isn't true in the slightest. You should play them sometime.