Video blurry after dragging it to composition
Your resolution is on a third
But most importantly, your video is 720 x 480 resolution but on a 1920 x 1080 timeline (so it seems), so you are scaling it to fit (you can't make up for a lack of resolution but upscaling your footage).


To get the right comp size, you can: 


Drag your video file onto the little film icon to the immediate left of the 8 bpc selector below your footage tree 
Or create a new composition based on the dimensions of your footage


There is no real point in making 480 footage 1080, it will not increase the quality.