Image size to resolution issue

To start off, I am very new, trying to get to know this software. Im sure its likely i am just not understanding something. If so i apologize and still appreciate any help.

Im planning on making a few things so im uploading images to see how i would need to do things.

The things i will be making are going to be 2.5w x 3.5l inches. The images im using to test and try to learn are these sizes but lose all resolution and detail until i make them larger.

Is there anything i am missing or need to do? Any other software that i can use with easel to assist me?

Ill attach some images to show what i mean.
Thank you for your help!

You will need to use a smaller bit… a vbit will achieve the most detail.

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