I can display them as .png files and they look perfect, but then I can't edit them as Visio files from Confluence. If they are displayed as Visio files (.vsdx) they are very blurry and difficult to read, although I can then edit them in Visio.
It's not currently possible to embed Visio diagrams on a Confluence page. The image you are likely seeing on the page is a compressed preview of the file.
For now, you might want to look into a 3rd-party plugin to make this happen, such as Visio for Confluence.
(Side note: there is a feature request open for this functionality that you can vote and comment on: CONFSERVER-27877. Be sure to watch the ticket for any updates on the feature from our product team!)
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