I always loved the way f1 cars looked visually; from iconic Williams Camels, to Marlboro Ferraris, West Mclarens, Jordan Benson & Hedges, Red Bull cars of nowadays, Petronas coloured Mercedes (and Sauber prior to that)... without sponsors, they would look badly as Prost, Jordan cars did, before they went bankrupt / were bought out.
Without sponsors, we would never have seen the iconic liveries we've seen.
So no - lack of sponsors does not make cars look better at all. I would argue it's the opposite; it makes them look boring and dull.