You're comparing a remake of an open world game with visuals designed to push fidelity, to one of the slower, already well-performing Sonic games on the Wii which, on top of having somewhat negligible visual changes, looks even worse in some regards as far as assets are concerned.This also was a Wii Game.
Xenoblade Chronicles Definitive Edition Runs At 504-720p Resolution In Docked Mode; Performance Is Stable
According to the game's leaked config files, Xenoblade Chronicles Definitive Edition runs at maximum 720p in docked mode, 540p in handheldwccftech.com
Like I said, it's the Switch, so expectations down to the ground.