Oh wow, that didn't even cross my mind as a possibility. My idea for it was pretty much the same as the one you first tried to do. I was actually writing up a reply on how to do that but saw you figured it out, so... awesome!
I think the issue I had with the font was actually an issue with Unity's text handling. The text is antialiased, which looks kinda weird in a non-antialiased game. I'm not sure how you can make it sharper with the base Unity text, but you could try TextMeshPro (on the asset store for free). As for sharpening up the image... I don't really know what the issue is, it feels like it's stretched in some strange way. Some pixels seem larger than others, etc. I don't know what your settings are for the image in Unity, but do you have the file format at 32 bit and the filter mode on point (no filter)? You could also try playing around with the pixels per unit.