It wasn't that they were amazing. Good enough.
And while maybe not amazing, they were wonderful at the time. Do you remember folks being amazed at the graphics on the PS1 or heck, even the N64? Those weren't good, really, but at the time? Yeah, it was good enough. Late 90's started seeing bigger tvs and sound systems. DVDs brought options to see all that stuff on the sides if you wanted. You didn't "make do" if you are out there buying modern tech - maybe you made do with whatever brands they sold at walmart - but then again, they sold game systems so it really wasn't "store brands only" or anything like that.
I'm not sure where you lived, but absolutely no theaters around me showed classics, save for something like Star Wars or Disney movies. One played second run movies - the ones in the space between theater release and home video release. So no, no one went to things like that. I graduated high school in the mid 90s, and both local theaters were pretty run down places that treated employees badly. The ones in smaller surrounding towns, if they had it, usually only played a handful of movies and were old places. And this seemed pretty normal for Indiana, outside of perhaps Indianapolis or a few richer areas.