Your camera is a Digital 8 camera.
The scanlines for this camera are less then standard DV (its less sharp).
Upscaling DV to HD is a difficult job let alone D8 material.
My advice would be leave it as it is.
If you want to use it in a HD project leave it the original size.
You can blur the background out with the same footagae as you often see on tv.
Yes its Digital 8.
but 720p is to small for submission of quality
Any alternative ?
Would CS6 help in this in anyway ?
CS6 is the came as CC.
Scaling up from 720x480 to 1280x720 will reduce quality period.
You could try Red Giants Hd instant plugin to give it bit of a boost.