Short answer :NO!
Long answer: This is not a full graphics overhaul. It's just the rendering-ending: we will have an upgraded "drawing engine". That's it. They are upgrading the part that displays the graphical assets (images) on your screen.
However, they are updating some graphic assets, but they're just the must-haves to ensure cohesiveness for what is displayed on the screen.
To get to the eye-candy level or AoC/TSW/EVE means a complete and thorough overhaul of ALL graphic assets of the game which will take a a handful of people years to complete.
The positive side of the engine upgrade is that it may generate more positive cash-flow for the AO team together with the rebalancing act and newbie startup experience. Thus, if AO starts bringing in more money and FC sees a future for this game, they may accept to expand the team which will end up with speeding up all sorts of improvements to the game including gradually upgrading the assets quality.
EVE has more people in their engine team than the entire AO team. Hell, EVE managed to get nVidia to help them with integrating tesellation in their games' engine. That's a serious effort on CCPs part and means the kind of money power AO team won't have any time soon.