I must've played a completely different game then as I never had any issues with load time problems or anything and the pixellation was not bad enough to take away from the immersion. Pretty much all pre-rendered backdrops suffered from resolution drops, this was far more noticeable in things like Resident Evil.

Sure it doesn't look great in retrospect, but in hindsight very few PSone games look great. I was watching Marshall Banana's stream of FFVIII and wondered how I ever thought that it looked good, with battle background skybox effects that don't even fill the entire screen etc. Honestly I'd say, aside from the menu overlay in battles, that IX has aged the best out of the 3 PSone installments.

I honestly doubt that it being on the PS2 instead of the PSone, would've made any difference to it's actual gameplay.