This may sound surprising on the face of it, but actually isn't: The higher you make the graphical resolution, polygon count, colour depth and whatnot, the easier it is for your game to look terrible. The crucial component in enjoying an audio-visual artwork is the mind: Your mind knows that you are looking at a flat computer screen. You are willing to accept that and not be bothered by it, and instead construct the mental image of the world that is being portrayed in your mind.
Now, if the visuals are highly stylized, sketchy or pixelated, the mind is attuned to that, and factors that out as "background" -- it doesn't get in the way of the mental construction of the scene. That's why a game like the original Monkey Island, with its 320x200 resolution, can get away with a door animation that consists of only two frames: We already accept that the scene is a pirate tavern, and we have no problem accepting that the door just opened.
But if you have a high resolution and want to go for photo-realism, then the mental expectations go up dramatically. It's no longer obvious that we're faced with visual fiction, and the mind does a lot less of the internal reconstruction work. The more realistic the input, the less the imagination is at work filling in the details. The (possibly unintended) side effect is that you as the designer must now go and produce all the details in actual graphics and 3D modelling. You've successfully un-outsourced the imaginative work from your consumer and signed your graphics design team on to the task.
An ill-fitting visual style and appeal can be a huge problem. If you ever felt that a game looks more like an Excel spreadsheet than a computer game, you know that the visual design has gone wrong.
As a consequence, you shouldn't try to aim for realism as much as for a coherent visual style. Realism doesn't give you immersion. On the contrary, it makes it vastly more difficult to achieve immersion. By contrast, having a unique, memorable visual style may be far simpler to produce and may well make your game recognizable, memorable and fun.