Different studios used various processes and equipment during development, but frequent testing on consumer gear was undoubtedly part of the process, if not the main way of testing. This is evident in a number of effects that abuse composite signal and CRT display characteristics, along with frequent reliance on undocumented and/or obscure console hardware quirks and edge-case behiavor that would not be evident from non-consumer gear.
There are also shots of Nintendo’s SMB development docs, which show grid paper with pixels significantly wider than they were tall, so fat circles definitely weren’t a product of laziness or lack of awareness of what hardware end-users would be using to consume the content.
Also, while consumer CRT TVs had a nominal aspect ratio of 4:3, they varied wildly in actual geometry and overscan, not to mention that many had hardware dials for adjusting horizontal and vertical size, so there was no way to ensure that everyone would see the exact same thing.
Another issue, still, is that studios didn’t always want to create entirely new assets for PAL releases (PAL has a significantly different resolution vs NTSC but the same nominal 4:3 aspect to the physical displays), so rather than have everything look correct on NTSC displays but look excessively tall on PAL sets, they would sometimes purposely make them slightly fat on NTSC so they would only be slightly tall for the subsequent PAL release.