At least with CRTs, it's not just the imagination. It's the actual analogue interpolation creating a different image than the raw pixel-perfect without blurring/smoothing.
obligatory supplement: everyone used CRTs for monitors back then, albeit of different resolutions for PCs and for watching TVs. It's not like devs had to mentally simulate the effect.
This video and timestamp comes to mind: https://youtu.be/2sxKJeYSBmI?si=ikuOuZl-Ho5_VK4k&t=1613