The grain exists in the source, and to be able to dig up more detail I had to sharpen the films on the smallest level of fine detail. This brings up more details, it really does, but also sharpens some of the grain but like I said, the grain IS there already. If we smooth out the films it will look waxy and ugly because of the low resolution of the source, and there would be no reason to even make it a blu-ray, because a DVD would be more than capable of reproducing the detail that is left.
The flicker DJ is mentioning is also there in the source, and is a weird byproduct of the bad aliasing/interlacing and maybe also the noise reduction LFL applied to the prints which also gave us the smearing. The reason it's more visible is because we've stabilized the gate weave, thus making our eyes focus more on details than the overall wobble of the picture. It's also more visible since the image is more detailed now!
To show you a comparison between "smoothed out" and "detailed" I took one shot from moth3r's website which is from DJ's V3, and on the bottom is the Blu V2 downscaled:
