One reason for creating 70mm blowups is sound! Remember that movies were still using the same sound specifications from the 20s! 70mm mag was a way to get high quality sound in a theater. Dolby helped rectify this in the 70s and 80s but digital sound pretty much killed off the biggest advantage of 70mm conversions.
Now I am actually not sure where down the pipeline a 70mm negative was created (my personal guess would be after an IP…) but it involves projecting a correctly de-anamorphized picture onto the 70mm negative. This process is only as good as the equipment used (lenses, lights, etc). The 35mm prints would have been contact printed so the IP is pressed against the unexposed negative and copied over. This results in a much cleaner picture.