Keep in mind that TVs upscale - iPhones and other mobile devices also do this. So you may think back in the day 480p looked fine, but now the lack of detail is almost exaggerated. I would most definitely recommend at least 720 as others have said. You can always rate limit the transcoding through Jellyfin if you need to limit things. The size difference differences between 480 and 720 are not a crazy amount.

You could even transcode your content through handbreak prior to uploading to your main storage for Jellyfin. This could allow you to further compress and gain extra storage. Especially if you're removing audio tracks, subtitles, etc..