To most people its just blur and they don't care that it is not just blur.
There are details, all of these are details; but saying that "iphone5-level-cameras are good enough form most people" is both true (obviously it sold and millions were satisfied with it) and false (most people would notice today that iphone5s take worse photos than latest-gen). All the details add up to image quality that _is_ noticeable even to the laymen.
This is largely true, when it comes to photos of other people/people they care about.
I'm a wedding & family photographer part time, and at nearly every wedding I shoot, the photos the clients and their guests favorite the most from the galleries are usually the quick candid snaps where the subject has an expression they like or are doing something fun. It could be a blurry, grainy, dark mess of a photo and it will consistently be their favorite photo of the day.
For most non-photographers, the subject of the photo is what matters and is all they will notice. Almost no one is making a distinction between bokeh shape, or noise (unless its so obvious as to completely ruin the photo), composition, etc.
All that to say, photo quality is only one very small part of the equation.