OK, here we go.
The native resolution of your file is good for a smartphone, or some other mobile device or small (old) TV. Your TV is too big for this resolution and not powerful enough. Just think about it, your TV have to upconvert your "skinny" video up to 1080 on a fly.
Combination of limited stream and huge gap in resolution creates pixelation and other artifacts.
What I would suggest is to try
A) hardwire your source (as my friend GregiBoy suggested), and/or
B) re-code your content to 1080 (or at least 720) resolution.
In this case your TV will have enough quality stream and don't have to work so hard trying stretch limited stream of small resolution content