I'm very sorry for the delayed answer. I noticed this post only recently.
Regarding the quality loss of images: We are aware of that problem and we're aktively working on a solution. It's caused by a certain library we're using for loading images from disk. It has limits for the image size and the resize algorithm is poor.
Again, this affects only reading images from disk. It does not happen when you paste the image into the Live Script. Thus, if you have the chance to open the original image in another application (e.g. Paint on Windows, or Preview on Mac), you can copy it there and then paste in MATLAB. That should preserve the original solution.
Btw, MATLAB Online does not have that limitation. Just in case you're using it.
Regarding SVG support: We're working on that, too. Stay tuned.
Thank you for using the Live Editor and your feedback!