your argument against abstraction is ridiculous, those sprites in earthworm Jim were already meant to be representing something more than what the available pixels could, they were traced over real drawings and paintings to try and emulate them. Also on the topic of the new EW vs the Old, i hope you do notice that the log and tires are extremely ugly in the new version, while the visual roughness in the retro one makes them look much nicer. Your scaled down high colour image means absolutely nothing in the context of the argument. We're not talking about lowres trying to be highres vs highres itself here, we're talking about retro graphics vs HD, and how the ambiguity of a retro graphic leaves lots for the mind to interpret.
I'm talking about 8x8-16x16 graphics, small stuff where 10-100 pixels can be an entire character, anything bigger than 16x16 isn't going to be really "retro", its just low-res, and even then using a small graphic isn't lazy, i find when games are high-res it can be just as ugly or uglier, especially when the art is badly done/designed and the large size leaves nothing to hide, plus animation just looks terrible at a large scale unless you have a giant team working on graphics, or its damn good paper-doll style animation.
Anyways back on topic, how can you tell me that having retro sprites and graphics doesn't have mental interpretation, when a one to a few PIXELs represents an eye, rather than an eye simply being an "eye" plain as day. When your drawing a curved surface or a sharp edge, in low res, you need to imagine what the mind would see very vague contrasting areas of colour and edge shape, while in a high res image everything is what everything is, and no matter how hard someone tries its easy to see that space suit as a space suit with folds here and there and everywhere. On the note of lighting, HD graphics can't look more "real" because lighting is baked into graphics low or high res, and with complex realistic graphics baked lighting doesn't leave much open to interpretation and can look damn weird when things are lit differently even in the slightest way. Having a character turn around in low res doesn't leave much visual "pop" while in HD its pretty damn clear someone just did a 180 in no time at all, and having a turnaround animation is never a good idea as it interrupts control.
Having retro graphics makes you focus on stuff differently, and because of that, it 100% is a stylistic choice, the fact that low res is easier to do is just a bonus added to an already strong style that can stand on its own.