Hi, Tony,
It might be that you are importing Photos app pics to iMovie that are stored in the cloud. Thus you would be importing small sized thumbnails rather than the original pics. That can happen when one has Optimized Storage enabled. With Optimized storage, photos that have not been recently opened are stored in the cloud until they are again opened in the Photos app. The specific photos in the cloud can vary. This could be why you are noticing fewer problematic photos when you tried with a new project.
If the above is your situation, the solution would be to open in the Photos app library all photos that you intend to use in your iMovie project. Or, you can export the photos from the Photos app to a folder on your desktop, and that would automatically result in the photos being downloaded. Then you can drag them from the desktop folder into the iMovie timeline.
I might add that if you turn off Optmized Storage, then all the photos that you have in the Cloud will download to your Photos app. Depending on the size of your photos library that could take a day or two, and/or result on consuming lots of free space. So, I suggest that you do not turn off optimized storage, if in fact you are using it, but rather individually download the photos that you want.
-- Rich
