I’m someone who doesn’t care about graphics a whole lot. I play most modern games at 1080p Mid/high on my RTX 3060.
And yet, I totally agree with your points. Many times, older games had rich looking environment from a distance, but if you go close or try to interact with it, it just breaks the illusion. Like, leaves can’t move independently or plants just don’t react to your trampling then etc.
A lot of graphical improvements are also accompanied with improvements in how elements interact with other elements in the game. And that definitely adds to the immersion, when you can feel like you’re a part of the environment.