Pokemon Sword and Shield is in a weird position where I simultaneously feel like the art and overall designs are pretty great, but also that the way they have presented the world so far is very ... bland. It looks very appealing at times, and also incredibly ugly at others. I think Nintendo is generally pretty good at hiding textures that might otherwise look ugly up close with things like art direction (aside from maybe some Kingdoms in Odyssey), but I don't know if GameFreak has that talent really, which is probably why you see things like the tree textures pointed out all the time (though I'd guess Nintendo's tree textures are also just better in general). Early impressions are very important too, and it's obvious the game has seen some pretty decent graphical updates since it was first revealed.
As for being one of the best looking Switch games? Yeah ... I really don't get that. In a year with Yoshi's Crafted World, Astral Chain, Link's Awakening, and Luigi's Mansion 3 ... I don't think it really makes the cut. We're getting to a point where even a lot of the 2D games on the Switch are pretty impressive. Though, Yoshi's Crafted World does suffer from a bit of a resolution problem, and Link's Awakening has framerate issues (which will probably be updated out, since it seems to be an issue with loading the environment rather than the graphics being too good). Games with simpler graphics also just look "better" than SwSh by the merit of how they're crafted.
Worse than Xenoblade 2 though, as mentioned in this thread? Ehhhhhhhhhhhhhhhhhhhhhhhhhhhh. Maybe Torna, which supposedly fixes the ugly resolution of XC2. But honestly, I think I might prefer the cleaner less dense approach of SwSh over Xenoblade 2's really bad blurry visuals, even if those are technically superior. Still, wish some of those environmental textures could be covered up better in SwSh.