Agreed that the top image looks pretty low res for it to work - when you start having trouble making out the details by eye, it's not likely going to work so well. Maybe it's a configuration issue, then? Is it possible to increase the resolution available to the software from the same camera? Otherwise, maybe you want a camera with a narrower field of view - that would give you the closer looking picture at a similar or farther difference, which may suit the application better than a fairly wide field of view general use camera.