Gameplay >>>>>>>>>>> Graphics, ALWAYS. Unless you're watching Metal Gear Solid 4.
Video games are an interactive media, not just a visual one. You want the game to play well, to handle well, to feel well. If the game can't be played, no amount of graphics can save it. Case in point: Sonic the Hedgehog 2006. The game looks and sounds really nice, but since they didn't finish making it before releasing it, it's a nearly unplayable mess. Being nearly unplayable means you can't progress, which is the point of a video game. Graphics are like the colors and patterns you put on the car after you build the essential framework and but the essential body on that framework.
Besides, think of how much information regarding the Pokemon and their stats, natures, IVs, EVs, personality values, etc etc for over 700 Pokemon that needs to be in the game. That likely doesn't leave room for super-OMG-NEXT-GEN graphics. Hell, even Pokemon Battle Revolution has pretty simple graphics for a Wii game, it even reused all of the models from the other console Pokemon games.
