To the human eye at least? I was set on getting the Air but if the mini has a better screen that you can actually notice than that makes the decision that much harder.
It will look as sharp as an iPhone screen. I have noticed that the iPhone screen is slightly sharper than my iPad 3's screen, but its not that noticeable.
Compared to the iPad 2, yes, most definitely. Compared to the original Mini, yes, most likely. Compared to the 9.7" iPad Retina, probably not unless you have really good near vision.