It's definitely the CRT / LCD issues.
CRT is equally good for all supported resolutions, but LCD image is blurrier the lower the resolution is than the monitor's native.
So a 640x480 games on a 1080p LCD monitor will look like blurry crap. You'd need at least 1024x768 original game resolution for it to be passable, and even then it will look blurry by comparison, and reading small text will be a huge pain.
immaxx: i don't know much about crt to led, that could be an issue.... but my old crt was ~23" and my new flat panel is 28 so i can't imagine 5" making that much a difference.
tburger: Size is not an issue here. CRTs just handle downscaling much better (without loosing image quality) than LCDs.
CRT's don't downscale at all. They actually draw variable pixel sizes. Hell they have variable pixel
shapes. Basically CRTs don't have a "native" resolution, they have a "maximum" resolution (which may even look worse than the next lowest resolution if it doesn't support a refresh rate above 60Hz)