We were in the same back in teh NES days as kids. In fact the Nintendo had corned so much of the market, I never even knew that other consoles has exisited in 80s (Sega Master System, Atari 7800, etc.). So the thought of the NES ever being usurped never came into my mind. Until that one fateful day circa Summer 1991 when the first commercial for Sonic the Hedgehog aired. Despite being a serious Nintendo fan, I was excited to see what the Sega Genesis has to offer.
I think although the 16-bit games no longer are impressive to us anymore, it made sense that they were back in the day because it was litterally double the graphical and procesing power of the NES and the like. With the Genesis and Super NES we were just beginning to see home consoles show an ability to look almost just like the arcade games of the time. That was exciting to us. In fact, the Sega built initial Genesis library around their arcade games.