The last line is correct.
Also, 16-bit isn't really the issue, it's the 8 channels. 8 channels may sound like plenty but more goes into 8 channels than instruments playing. Writing a score and bringing musicians into a sound studio takes a bit more organizing, but the end result pays for itself. A solo composer using analog equipment to write tracks in 16 bit trying to emulate what it would sound like with a full room of musicians isn't very easy to accomplish.
The higher quality of todays music is more a result of the technology available over time and effort. A lot of these guys were working such a limited amount of space on the cartridge to begin with, they had to write specifically to fill memory quotas, whereas in the CD age music could just be re-rendered at a lower bitrate without compromising any of the elements of the track.
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