Everything about NWN looks awful. It's like they grabbed some random intern and told them to make the art. Even the 3D models look terrible by 2002 standards -- it released after games like Metal Gear Solid 2 and around the same time as No One Lives Forever 2.
These are not comparable though, NWN1 had to display a lot of models for the aerial perspective, the models were made up of multiple reusable pieces (limbs, heads, weapons, items, etc) that needed to be loaded in memory (since in online mode any character could wear anything, so they couldn't be precached), the worlds were also made up of reusable pieces and they were often animated. The lighting in NWN1 was realtime (and at the time it was done in CPU, as well as the animation) for all affected geometry with multiple light sources and realistic volumetric shadows for each light source - a method that requires watertight meshes (meaning they had to put geometry even in places you couldn't see - there are a couple of places in Shadows of Undrentide where they didn't do that properly and shadows glitch in the entire scene) and due to silhouette calculations it imposes a low polycount (see how Doom 3 and F.E.A.R. which used the same shadow method had overall lower polygon counts than the previous games from their respective developers - though they also had normal maps, which NWN1 lacked since GPUs couldn't do that at the time :-P). The lack of weighted skeletal animation was also most likely done to save CPU time considering the amount of animated character models on screen. Also the artists didn't really know how these assets will be used since NWN1 was largely meant to be played with custom content and/or online, so it makes sense to err on the side of caution.
NOLF2 on the other hand is made up of heavily preprocessed maps that remove any unseen geometry, have precalculated lighting in lightmaps, the shadows are projected black textures that fade out over a distance, show only a small part of the map from a low height perspective, have only a few repeated high poly models (and those are not modular but instead made as a single piece), the designers are in complete control over what and how many models each map area will use (meaning if they can place a few high fidelity models in an area without fear that they could go over budget due to player actions).
Note that i'm not arguing that NWN1 looks better than NOLF2, the latter is obviously a better looking game and NWN1 could have had better looking art assets without affecting its polycount and texture work. However the two games are very different and have very different requirements from their respective rendering engines, which in turn affects how the art assets would be made and considering the limitations of the hardware at the time (i remember people playing it with their voodoos at the lowest settings), it wouldn't be possible to get NOLF2 quality graphics on NWN1 without also severely limiting NWN1's features.