Yeah, 16x16 is like a SNES sprite, and on today's monitors that's SUPER small. So when you zoom in, it will become blurry. Now, if you want to do Minecraft like pixel graphics, they still need to be large resolution, as a low res image will just stretch and look strange.
For other reference, a GameBoy (original b/w style) sprite max size is 8x16. Gameboy resolution is 160x144. So think about that before you use such small sprites on high resolution displays. So if Mario on Gameboy is about 1/4th the size of the screen, then on your computer monitor he should be about 1/100th the size or so. (seemingly super small)