Quoted By:
The important difference between early and recent gen games is technical limitations.
With the limitations of the GBC (and GB to an extent too but I think Gen 1 was more of a proof of concept than anything properly fleshed out), GF had to make the sprites and color palettes really beautiful to make up for the relative lack of variety (storage and memory contraints) in tilesets. That's where the SOUL comes from in Gen 2 in my opinion.
RSE also had this to an extent, but FRLG was a little generic in terms of art direction. Then as you get into the 3D stuff it's just downhill, as there are fewer technical limitations for the devs to creatively contend with.
It's a little bit like old vs modern software; optimization was key when everyone ran shitty systems, but now devs have gotten lazy with the assumption that everyone has modern processors. See old geocities pages ("soul") vs modern "fake minimalist" JavaScript, ad, and tracker-laden sites ("soulless").