The improvements are not quite enough to make me jealous, the only thing that would tempt me is a serious CPU/GPU upgrade. 1600p is sort of useless when you can't even run ps4-era games at that resolution.
I'd argue with FSR at that screen size it is not useless at all.
You watch video? It's super crisp.
You're playing a 2D platformer at native 1600p? It's super crisp.
You're playing a super demanding game? Render at 800p and either FSR or the fact that you're at exactly 2x scale with 1600p makes it so the image is super crisp as well.
It also doesn’t have VRR support which makes that 144hz screen a lot worse. I also have a ROG Ally and I am still happy with my purchase.
VRR missing is probably the only thing holding me back from swapping my Ally for it. It's sooo underrated of a feature, especially in hardware like those Windows handhelds.