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pixelated is an artifact that usualy come from sharpening, low resolution and not using an blurring effect like AA on games yes AA makes games less sharp which is working as intended "nothing" is sharper then aliasing.
and you want a reasonable explanation why your settings are "wrong". well that pretty simple and can be objectively proven.
a movie is created on an calibrated screen and so other user with an calibrated screen will get the same image from the mastering screen. this makes it objectively a correct image and settings that recreate this image are so objectively "correct".
your settings doesn't do that which makes them incorrect.
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