You might want to look into N64 emulators like Project64. They do something similar, though closer to emulation than remake. They allow you to render the 3D objects at a higher resolution and replace the textures with arbitrary bitmap images.
Yep, very similar idea! Key difference is that DOS games didn't use a standard 3D API so you can't just intercept that and replace higher quality textures - you'd have to intercept and rewrite the renderer itself.