I just watched a documentary last night that stated a new discovery was so far away in our solar system the Hubble could only show it as a few blurred pixels, Robert Fosbury narrated and it was called Hubble 15 years of discovery. Also noted the same thing about “ Farout “ It is 120 AU from the sun, 1 AU being about 93 million miles, so if Hubbles mirror can only define it as few blurred tiny pixels how again do we see 13.7 billion light years ?
Of course, if you compare two objects that are the same size but are at different distances, the nearby object will be easier to see. But when making astronomical observations, the amount of light we receive from the object and the apparent angle matter more than the distance alone.
For instance, the Andromeda galaxy is further away than Pluto, but it is easier to observe. This is because it emits more light than Pluto, and it is so very big that it takes up 3° in the sky, whereas Pluto appears as a single point when observed with a telescope (or a few blurry pixels, depending on the telescope).
The things we see that are 13 billion light years away are very bright galaxies. We are unable to see individual stars at that distance, let alone asteroids or comets.