My game uses 16x16 size as well.
The one on the left Is the actual size and the one on the right is zoomed a little more than 300%, as you can see it also starts to blur, And it makes perfect sense.
Here is how it works very basic:
The top row of images I have made the image on the left which is 2x2, And the right one is the scaled up version. As an image consist of X*Y amount of pixels, which each hold some color information. The images on the left have 4 pixels to show the four colors. As you scale up the image you get more pixels. In this case the right one have 16*16 = 256 pixels. But since the original image only consist of 4 pixel, it suddenly have to fill in something for all the added pixels, and that why you get this blur or color bleeding. Simply because there are not enough information in the original image for it be scales that much.
In the lower example the original image is the one on the right. As it is scaled down you start to loose details, this is because the scaled down version simply doesn't have enough pixel to show all the details that are required.
In my experience it always better to scale down than up, because as the image gets smaller its also harder to see the details, so if some of them should disappear its not as bad as things starting to get blurred.
But in general its best to render in the exact size that you need, or only scale by a small factor where you think its acceptable. So working with 16x16 or 256 pixels, there are not really a lot of room for details.