Understanding iMovie Resolution on Crop....

Okay!

So I've noticed that when you crop down a movie in iMovie you lose a lot of resolution quality - it gets fuzzy.

This would be logical if you were always exporting at maximum resolution but doesn't make much sense to me if I'm exporting at a lesser quality. Here out my logic and tell me what I'm doing wrong:

Let's say we've got a movie that's 2000x1000 px originally (I realize that's a fake ratio, but makes the math easy for this example).

I export it at 1000x500 - so half the size, somewhere in there the resolution gets compressed... I don't know how.

Now, if at some point in the movie I crop an area that's equal to half the screen - a box 1000x500 on the original 2000x1000 box then shouldn't the final export be smart enough to remember the size of the box and pare it down to a resolution equal to the resolution of the rest of the final movie?

Does this make sense?

Why am I wrong here? Anyone have best practices to keep cropped areas at a decent resolution?