BetterDisplay lets you set fractional resolutions for any displays on Mac. While this seems like a compromise, it lets you scale the ui to you preferred size independently of the native resolution. I use my 5k display at 85% which is a bit easier on my eyes than native 100%.
I've tried a few apps including better display to find a better resolution for my portable 16 inch monitor. It does allow you to set the resolution you want, but it's a bit blurry.
No way to really fix it, it's just another Mac shortcoming. Using resolution to scale the UI is not a compromise, it's a mediocre workaround.
I'd call that a shortcoming of all hardware that isn't retina resolution, but I know how that sounds to anyone who isn't bought into the ecosystem.
To be clear, I criticize the hell out of the company on things that I think are truly bad. Their app store policies are a disaster. I get that gamers want framerates over resolution. I'm not a gamer and want the other thing.
It's a shortcoming of the software. Apple could claim it's a third-party issue if they didn't support arbitrary external monitors, but they do. As such it's entirely reasonable to expect a fallback solution for third-party displays that Just Works.
For my money, Windows is a terrible operating system but it embarrasses Mac and Linux thoroughly in this regard.
mac users love to repeat this but it's just nonsense. if you can plug another non-mac computer into the same display and get crystal clear, correctly scaled UI then the screen isn't the problem, the computer is.