I don't feel like finding it right now, but if I recall correctly, I vaguely remember a Playtonic team member clarifying somewhere that the "N64 graphics" options is simply a shader, NOT a feature that will alter the actual graphics (character models, items, objects, etc.) in any way. Don't expect low-poly graphics, because I sincerely doubt that's what we will be getting. As stated by Taylor above, that would create a lot of extra work for the team.
Maybe a member of Playtonic who happens to view this thread can clarify that for us again, if possible. I feel like too many people are expecting low-poly graphics... those people will be sorely disappointed when the game does not meet those expectations.
That being said, it'd be a cool DLC feature, or perhaps something to consider for the next game. N64-style music would also be a cool DLC package. Grant has said in a tweet that such a thing is definitely possible, but improbable at this point in development.