Well if Wii U did output 240x160, which I'm not sure it's capable, many TVs would get out of range errors. They have to be internally upscaled and in fact all VC games since Wii are (infact N64 were natively rendered at 480p). It really just depends on what scaler algorithm they use.
Right, okay, that was my mistake. My TV would not do any scaling, you're right. But based on how they usually do VC games (again to my knowledge, correct me if I'm wrong) but the game itself is rendered at whatever resolution it was originally at, then upscaled by the console. So Super Mario Bros. on the Wii VC is rendered at 256x240, then upscaled to whatever the output is set at (480i or 480p, depending on if you're using composite of component). So Super Mario Bros on the Wii U VC is rendered at 256x240, then upscaled by the console to whatever your display output is (generally 1080p, I'd imagine).
I don't know all the intricate details of how they work their VC, so any new information is welcome, but that is what I had heard.
edit: and my main point, yes it depends on what scaler algorithm they use, and I hope it's great, but in my mind a 240x160 game upscaled to 1920x1080 would not look good. I'm open to being proven wrong (I'm putting off buying GBA games until I get some impressions on how the VC releases work) but my initial reaction was that.