I think he's talking about graphics IE: lighting, textures, AA, tessellation <---you know measurable things that aren't up for opinion.
As for
gameplay>graphics
Different departments handle this so better graphics doesnt impact any other department (with skyrims sort of funding).
The reason Bethesda isn't going all out with graphics on the PC is that they want all 3 platforms to look similar, so they won't "anger" 90% of the fanbase, however, I play console and I don't give a damn if PCs have better graphics, why should any console gamer get frustrated? That's what confuses me.
PC players need to accept the fact that Bethesda is going to cater to the audience that makes them the most money, ala the console players. But you then ask, wouldn't it make sense for Beth to make the game look better on the PC as to attract more PC players? This brings me back to my first point, in which Bethesda is afraid that console gamers would feel cheated, and Bethesda doesn't want to take that risk (Just imagine all the angry 12 year olds.)
Besides, they don't want to spend the extra money to improve the graphics on the PC, simply because they already have something that will draw most PC players to them anyways; The CK. Therefore, they'd put it upon the modders to make better textures for the PC version. It's like a bait, and quite frankly, that's a very smart move made by Bethesda in terms of marketing.
Man I hate typing on an Ipod..