You tube is video. 720P refers to the picture quality and has no effect on sound quality. You tube renders to MP4, which is basically the equivilant to MP3 sound quality. That's about the best you can get with Youtube.
So it looks like on YouTube when you jump from 360p up to 720p the audio goes from 96k AAC to 192k AAC. Should be better, but of course it depends on the material as to whether you will hear any noticeable difference.
BTW, AAC is similar to MP3 and nominally (supposedly) better.