Yes, you definitely need to address the resolution.

To me, it looks a bit as though the land is "bubbled" up above the water. Like there's a very steep but rounded slope going down to the water all the way around. It looks more like a bevel than an edge gradient, really. It's hard to say what you need to do with it, or even if it's really a problem, without seeing the smoothed version.

Suffice to say, I read the land as land in this map. So far, at least.