In 1995-97, it certainly felt a lot more modern than its Mac OS contemporary (System 7) which had almost an antique patina with its Chicago font and remnants of the original black-and-white design. Apple was supposed to ship an UI revamp as part of the Copland project, but it failed, leaving System 7 as the only option until 1997.
The Platinum theme in Mac OS 8 was inherited from Copland. It was a definite improvement, but not much more than closing the obvious look-and-feel gap in comparison to Windows.
The finer points of the classic Mac OS UI like the spatial Finder were only appreciated by a small minority. For most people, Windows offered much more tangible advantages like actual multitasking and memory protection (so an application crash won't take down the whole system). It's easy to forget just how primitive classic Mac OS was.