If you want to discuss about graphics quality.
You have to speak about high level pixel art of Irem and Toaplan. ( dogyunn, in the hunt etc...)
About resolutions, Irem at the end of 80's was on 384*256 ( Irem M72 : R-type, ninja spirit, dragon breed etc...)
http://www.system16.com/hardware.php?id=738
And later beginning of 90's , Irem M92 was on 320*240. ( undercover cops, in the hunt, gunforce 2...)
About Capcom, before cps 1 , street fighter 1 and Side Arms was already on 384*224.
Graphically, Cps1 was a graphical revolution at the time, combination of 384*224 with modern design for the time.
Cps 1 was all about graphics and great gameplay and replay-value, no use of multiple background layers ( just two and rarely 3 background layers ) , no zoom, no special effects.
Thanks to great graphics, great gameplay and replay-value, they have developed great masterpiece.
Just the first game, Forgotten World is a total success.
Also Irem was on the same style, top notch graphics, great gameplay and no use of special effects.
For special effects, it was more Taito, Sega,Namco, Konami... that used super-scalers, rotations etc...
Please, if you want to dream about arcade , watch AM Show and Aou Show 1991, 1992 :
https://www.youtube.com/watch?v=X3Sg4brHu8g