I believe this part here is the culprit. It needs to be able to project a different display for either eye to make the 3D effect work, which likely limits how high it can go for now. Which is ironic, because Big Boss loses his eye in Metal Gear Solid 3.
That's pretty much the thing with stereoscopic images. You're going to have to sacrifice half the horizontal resolution to overlay the two differing images if you want to preserve the colours. I'm just rather intrigued in the filter used to mask off the images between the eyes.
As for the poor resolution, the thing is, we're comparing a 3.5" to a 4.3" screen which the PSP uses. The PSP has a screen resolution of 480*272. Here's an overlay showing the differences in the resolutions:

In terms of actual dots per inch, I think the screens are almost equal.
I suspect the decision to have a minor improvement in resolution comes down to:
Power usage
Cost
I don't think physical dimensions is that much of a problem, the DSiXL seems to be a reasonable size so they could have gone for a larger screen, but who knows? I'll be lying if I said I wasn't disappointed that they didn't increase the screen resolutions for both screens. Even if the main contention was actually in the visual degradation in small scale upscaling of the DS titles, I personally feel that a 320*240 screen is pitifully small and a really big limitation in the UI designs you can have if you want to use the lower screen as a pure UI. Anyhow, useless to complain about those decisions here.
I honestly don't think LovePlus will ever make it out of Japan. I'm still waiting for IdolM@ster, dammit!