Alterdst8: I pressed f10 and got into an options menu but the only thing it allows me to change is the keyboard layouts and the graphics setting, which is already set to high. Is there another options menu I'm not seeing?
Links: Disregard what OP-2019 is saying. Even if there was a way to get "pixel-sharp graphics" in a game with less than 640x480 graphics (can't remember the actual resolution, it's not one of the standard ones I think), it is not within game, of course. The person you quoted believes that increasing the output resolution of DOSBox would somehow make the graphics look different. It does not. Unless you are trying to smudge them with crappy anti-aliasing filters that make everything look like it's made from plasticine.
You are playing the 1994 DOS port of the game, it looks as it looks; that is: almost exactly as it did in the arcade machines.
You can make it pixel-perfect, but not through the in-game options. There you can only set the game to high details via f10 menu, but that's it.
First, if your gpu supports integer scaling, you should use it (otherwise/or use newer dosbox version that supports higher than normal3x. Don't use gpu/display scaling like fit to screen, or stretching with maintained aspect etc - they are blur inducers ofc).
MK1 dos port here on gog runs in 720x400 (with dynamic black borders for compatibility reasons I reckon), despite the original native resolution of dos version is 320x200. I suspect that gog staff patched in those black borders so it ran on widescreen monitors easier years ago.
Best thing you can do now is to edit dosboxMortalKombat.conf and set fullscreen=true, resolution=original, output=surface and under renderer set the scaler=normal2x. Aspect correction should remain at aspec=false, otherwise it gets stretched to 320x240.
This alone should get you to 720x400 picture (where game itself is 640x400 centered), which then gets integer scaled higher by your gpu as much as your screen allows, surrounded by black borders. In my case on 1440p display it is another x3, so the total is 1920x1200, rest is black border. If only the gog version didn't add those superficial black borders, it would have scaled higher on my end (up to x7 native, so 2240x1400), but I will take this smaller size over blurry picture anyday.
Alternatively as mentioned, use newer dosbox with scalers like normal5x etc, whatever fits your screen native res.
Edit: Here is the comparison shot of both the Arcade kollection from Steam and GOG's dos version:
https://imgur.com/a/fk8Lcqg You can download that imgur post and open the png files directly fullscreen to compare 1:1 and cycle between them.
Steam version is blurry and has that stretched aspect mentioned earlier (with additional filters, it can be made even more blurry if one desires ;)
Edit2: After much debate with fellow MK gurus, the final consensus was that the ASPECT should be set to TRUE (like almost if not all vga mode 13h games), to stretch it to 4:3 just like on crts in arcades back in the day. It looks a bit more stretched out on our modern flat lcd panels compared to curved crts, but it's still closer to the desired final result.