L3D should automatically use high-res lemmings if there's enough memory (which there should always be when running it under DOSBox), no special command line needed.
Looking bad in full screen is mostly just to do with the fact that modern screens work differently from the screens of L3D's era. You can try messing around with the scaler settings / output window size in DOSBox's options, but ultimately, the only way to get it really looking like it was intended is to dig out an old CRT screen.