Graphics and UI elements yes. Text no.
If the UI elements get sharper because of the increased PPI, then so does the text.
Because 1) PPI has increased but resolution remains the same.
If that doesn't increase the sharpness of the text, then it doesn't increase the sharpness of the UI elements either.
2) The smaller screen means that the normal viewing distance has changed
Source? My supervisor doesn't know much about his brand-new iPad mini, so I end up doing a lot of stuff with it to set up stuff. I hold it at the same distance I hold my iPad 4. In the same way the typical (not ideal) viewing distance between a 32" TV and a 42" TV is often largely the same. I realize there's a technical specification for viewing distance based on screen size and resolution, but I'm talking about typical usage, not tech specs.
3) Same OS with the same rendering engine (the only way to make it sharper ath the same resolution would be to render fonts larger, which would allow more anti-aliasing). When you combine all 3 of these it negates any benefit to text from a higher PPI.
See, this is where I think we're butting heads. I realize that the text is being rendered the same way, and so is not actually sharper in that sense, but it looks sharper. The perceived sharpness is increased. I'm not talking about sharpness as a technical term, as it relates to font rendering, I'm talking about how it looks. I've used an iPad 2 quite a bit, and the text on the iPad mini's screen LOOKS sharper because it's smaller.
Amusingly, only half my post was about text sharpness, yet you said almost every sentence was objectively incorrect. Do you also disagree with my statements about the mini being better in a lot of ways to the iPad 2 that aren't related to power?