"I've noticed that pre-rendered graphics look great on the SNES but look like ass on the GBA. I imagine it has to do with brightness required for GBA games. Pre-rendered sprites look best with more shadows."
The resolution plays a significant part of that too. Part of the reason DKC on GBA looked worse in some respects have everything to do with the 64 vertical pixel difference between the SNES and the GBA. Make the sprites too big and you'll have a situation similar to what Mega Man and Bass suffered through to an extent on the GBA, graphics taking up too much screen real estate. (though I will give them credit for some clever cropping) Technically speaking, there was no reason for DKC to come out inferior looking given the hardware spec is a bit more than that of an SNES, other than the GBA screen. Now the DS takes the brightness and color issue out of it since it's backlit, so if they were to do something like this on there instead, it SHOULD be every bit as good, if not FAR superior to the SNES.
I actually have to agree with you on MvDK's style. What that game needed was a solidly drawn true 2D cel aninated look to it instead of the 3D rendering they did. Yeah, it looked slick but it had no life to it. It kinda felt like, "here's your graphics" instead of "here's your world."
I can give you another reason to like sprites over polys in a 2D world. Sprite collision detection is just boxes, 3D models need collision spheres which can be a lot more iffy at times.