Well they are certainly looking better, but improved level design is questionable.
Games like Shadow of the Collossus on PS2 proves that in some way thing are certainly improving, but some games just
have awful level design.
Also look at New Super Mario Bros on DS, the level design in that are typically much clever than that in any of his 2D
NES/SNES outings (world 2-6 anyone), but at the same time play very similarly.
In conculsion overall I say yes, but there certainly are still a lot of rubbish and uninspired game worlds as well.