The Babylon 5 team had tried to prepare for that as well by keeping digital masters of all the effects. It would have meant recompositing, which isn't necessarily cheap, but in theory they could have run the exact same effects at a higher resolution.

Unfortunately, Warner Brothers lost those files. Rumor has it when they sent copies to Sierra (really Vivendi at the time, just before the Activision acquisition) for a Babylon 5 videogame the WB Archives team accidentally sent their only copy and that when the videogame project was shutdown they destroyed the copies per the IP license agreement.

There's a high probability that even if WB had had the digital masters of the effects, they probably still would have stuck to the 4:3 restoration over the 16:9 restoration to avoid recompositing costs, but it's still such a weird swing of bad luck that the production team thought ahead about HD technology well enough as well as anyone could at that time and yet the 4K copy we have in this timeline is in the wrong aspect ratio.

I don't know, currently watching Babylon 5 Season 3 and I think the CG is pretty impressive. It's not high resolution or sharp, but the ray tracing is excellent. A lot of moving parts flying around everywhere with lighting and planets in the background.