About the N64 games looking filtered... I believe N64 games rendered at 640x480. That was effectively twice the resolution PS1 games ran at.
Both N64 and PS1 were capable of 640x480, but very very few games actually ran at that resolution, even on the N64. It's too taxing on the hardware, and without some serious custom code to stream off of the cartridge (see Factor 5's [parasitic bomb]), your limitations in textures, draw distance, and such will be shot to hell. The N64's architecture didn't exactly cut developers a lot of slack in the texture department anyway.
The reason certain N64 games are seen to have poorer textures is due to shortsightedness in the hardware design; the N64 has an extremely small texture cache (4KB), which often restricted devs to small/low color textures that had to be stretched to cover larger surfaces.
BTW, your resolution logic is backwards. The greater the number of pixels in the same area, the sharper the image, not the other way around (if you don't believe me, pick up an Expansion Pack and a game that allows switching resolution modes mid-game, such as one of the two Vigilante 8 titles). 640x480 is the sharpest you get on an SD set.
When I speak of "filtering", I am referring to the fact that actual N64 hardware uses bilinear
filtering, while the VC emulator does not. Many visuals look sharper on VC that way since textures aren't as blurred, but certain 2D visuals look more "blocky" when zoomed in (especially noticeable in Mario Kart 64 and Yoshi's Story).
This could be a possible explanation for the PS1 version looking clearer. It may just be our TV technology has increased now, not so much the game.
I assure you that is not the case; all of my systems are hooked up to SDTVs with composite cables (I know, behind the times, blah blah blah).