Here's my not very well written opinion on this:
Anything rendered by the 16-bit part of the system was still limited to using the four 16-colour sub-palettes. For MK2 the sprites were offloaded to the 32x, leaving extra sub-palettes for the backgrounds, which were handled by the 16-bit VDP.
Sounds great, but it's not too ideal when you think about it. The backgrounds are made up of 8x8 tiles, with each tile having to use a single sub-palette. For realistic looking backgrounds where tiles would have to seamlessly blend, either there would likely have to be lots of shared colours between sub-palettes, or each sub-palette would have to be used on distinct areas of background (like those chains). Probably a mix of the two.
Whatever the case, the end result of the palettized tile based system is that the artists were still quite limited in how they could use colour in parts not rendered by the 32x. They couldn't just pick a total of 64 unique colours and put them wherever they wanted. That would be my guess as to why the enhanced 32x ports looked a little underwhelming.
EDIT: All that being said, I'd like to take a closer look at the 32x backgrounds. Judging from that dead pool example they might be worse than I thought. I'm not convinced that background is using any more colours than the 16-bit version (I'm assuming the foreground chain is a 32x generated sprite so it doesn't count), rather it was just tweaked. Were Probe actually taking advantage of the extra available colours?
That probably is correct. Here is a closer comparison between the 32X and Genesis version of the game (at least the best that I can do):
32X version:
32x version with the Genesis VPD layer turned off:
When I disable the Genesis VPD layers, what is left in the above screenshot is what the 32x is rendering. With all layers turned on, there is 149 colours in this scene. when I turn the BG layers off, there is 134. Both the characters are made up of 117 colours, Jax has a palette of 61 colours while Mileena is 62. The status bar has 17 colours and the dragon has 6. The background should be made up of at least 15-20 colours in this scene. It's a bit hard to tell since I can't shut off the 32x layers and look.
Genesis/ Mega Drive version:
Using the same comparison, there are 33 colours in this scene. Both characters are made up of about 25 colours combined, with Jax being made up of 13 and Mileena being made up of 14. The status bar is made up of 5 colours (or more when damage occurs) and the background is 18 colours. There are also no flying dragons in the scene.
Characters got an upgrade in colour, but not in resolution. Though it is hard to say if the 32x version has more frames of animation. It might have a few more. The shadows are also complete cutouts of the character sprites, while the Genesis/ MD uses circular shadows.
The 32X version also does have the arcade intro and character portraits that are missing from the Genesis/ MD version. There are also a lot more sound samples present in the 32x version as well. The 32x version has more of the arcade sound samples in it then the SNES version, and they are at a higher quality too. But the music is unchanged from the Genesis/ MD game.
In every way the 32x version is better than (or equal to) the Genesis port, but in some ways it is worse than the SNES version. So there you go.