Old games didnt have to emulate 8+ cpus in perfect synch so duh.
The SSF website says that "the final goal of the emulator is to perfectly reproducate the Saturn hardware, not running games in high resolution or more beautiful then the real hardware", and that "even though its slow, a screen generated by software will be identical to the real hardware as much as possible". So I wouldn't hold my breath for increased graphics (I admit a resolution selector would be nice, for PAL games for example).
The two video processors don't work in a way that you can just increase resolution in them, to do that, you'd need to simulate things in the hardware, which introduces issues as said before. Remember that the Saturn is designed mainly for 2d processing, not 3d. In fact there are only a handful 3d titles which dont look horrible on the Saturn.
The doubled resolution is used to match a TV (scanlines, etc), and its handy because your monitor doesnt have to switch resolutions that often. The increasment is exactly 2x so its a lossless stretching anyway.