Just adding on to this, I do think the “up-specced OG hardware” approach something Nintendo has done before. Upgrades like GC to Wii and Game Boy to Game Boy Color are really just boosts to the clock speeds and RAM, they don’t have anything specifically included for BC reasons (unless you’re counting GameCube memory card slots). They really are just iterations on the same hardware. Similar to the New 3DS, on modded consoles you can run GameCube games at Wii clock speeds and they almost all work without issue.
On that subject, the fact that Nintendo says the compatibility won’t be 100% is potentially encouraging. If the Switch 2 was just going to downclock compatible parts to their Switch 1 performance and was otherwise identical, you’d expect all games to work. The reduction in compatibility could be because games are going to be running with Switch 2 clocks across the board, which most games should handle just fine and a small handful may not.
That is how every previous Nintendo back-compat implementation has worked.
In every case, the system drops back to the earlier console’s hardware specifications. There are hybrid cross-gen games on some of the handhelds which offer improvements on the newer hardware, but up to this point, older games have never been updated to get the improvements of newer hardware. That doesn’t necessarily mean the same will hold, but I’d suggest you assume it will and be pleasantly surprised if they buck the trend.
Are we just gonna pretend Bubsy 3D never existed?