Oh, you can make a UI in fullscreen mode? That's different, then. That only leaves the problem where users don't know how to exit full screen mode....
Besides, it's not like the PC is the actual N64 console: It's only purpose is not playing video games. For the N64 it is, therefore, there isn't a good reason why not to have games running in fullscreen mode on your TV, but for the PC, it's only classic to just keep emulation in window mode at default. The interface is already there, and if there was a UI in fullscreen mode for Project64, not many inexperienced users would figure that out, unless it appeared in front of them without emulation being paused.