Basically, TF2 looked sharp, bright and colourful and the other just look bland expecially altered beast (I wa also expecting Truxton to look better than TF2 but was not very impressive).
TFII does look more shaded and has better color than Altered Beast, which is pretty bland in the stages. Truxton has duller color. Try playing something like Ristar, Dynamite Heady, Wonderboy in Monster World, SSFII, Sonics, Rocket Knight Adv, Shining Forces, Phantasy Star IV, TMNTs, Mean Bean Machine, etc.
The pixels should be sharp and colors should look pretty solid, except for red which tends to bleed. Many Genesis games were designed around being seen through blurry composite. The difference between Double Dragon in s-video and standard composite is dramatic.