Graphics DO matter. Polygon counts do not.
I still regularly play games from the 16-bit era, and some of my favourite games are from then even if I didn't play the games until years after they were released, and as such the graphics were very "dated" in a purely technical sense.
To me, games are are made great by their feel and immersion more than anything else. Ninja Gaiden made you feel like a badass ninja, not some guy hitting "X" and "Y" to make pixels move. Rome: Total War made you feel like a Roman General (when your soldiers actually behave properly). Slick presentation and production values can add to that immensly. I want to SEE my cities growing and expanding, not just a slider telling me they are. I want to gaze across my empire. Basically, anything that makes you go "THIS IS JUST A GAME" and snaps immersion like a twig is a bad thing.
That being said, I find a lot of developers spend far too much time trying to make a game look "impressive" rather than looking "good" which hurts the game in the long run. Take Baldur's Gate 2 for example. It was never really all that impressive to look at, but it's graphics hold up surprising well 10 years later. On the other end of the spectrum is something like Final Fantasy 7 (Which I DO love), was technically brilliant back in the day but actually looks silly now, and arguably worse than the Super Nintendo games. Elemental seems to look really good, and I think it will stand up better than many games that try to go the realistic approach.
Of course, I'm one of those "Games are art" people, so I get all excited whenever I see a new and interesting art style for a game, and Elemental certainly delivers on that.
