Developers and console manufacturers found ways to work within the limitations of the cartridge based system.

Look at the difference between the first Super Mario on NES and Super Mario on SNES. Metroid vs Super Metroid. SNES had mode 7 graphics and Genesis actually had the ability to emulate 3D graphics.

The color palette from the NES was 54 (400+ if you include the tinting effects) while the SNES had 32,000 and could show off 256 colors at once (which is why we got that sick photorealistic Shaq Fu title screen).

And that's not even just in graphics. Sound quality was a major improvement between those generations. Stereo sound, orchestrations/arrangements, simulated voice processing.

The graphical jump from 16-bit > CD-era games was a technological achievement but it's all just throwing horsepower behind proprietary graphic chipsets and making shit more realistic. 16 bit era was devs actually getting complex with the tools they had on hand.