The NEF data and the jpeg data are the same image dimensions. So, they "pixellate" at the same point when you zoom in. Depending on your camera settings, the jpeg may be sharper and the colors punchier than the NEF, too. So in your case, the first-look NEF quality should appear to be roughly the same or maybe a little worse than the jpeg.
In Elements working on the NEF data, you can basically apply the same corrections the camera applied to the jpeg, but using more powerful tools and tailoring the changes to each individual image. So you should end up with a result that is somewhere between the same and way better than the jpeg the camera created. TYpically, you might correct the following either manually or semi-automatically: chromatic aberration (color fringeing), vignetting, softness (i.e. sharpening the image), adjusting color, anamorphosis, keystoning, remove ISO noise (that's a tradeoff with sharpness), dust removal, highlight recovery, etc etc.
RAW doesn't automagically give you a better result, it gives you the opportunity to get a better result.