There are a number of different ways to try and solve this issue:
1. Edit > Preferences > Displays & Cursors > High Density Displays > UI Scale Factor = Large - 200%
Personally, I find this to be a poor solution as my display density is too low for such scaling, so a lot of the interface cannot fit on the screen, but it might work for you.
2. Start > Settings > System > Display > Scale and layout > Display resolution = choose a lower resolution
On my laptop, going from the default 1920 x 1080 down to 1280 x 720 makes Elements look great - everything else looks rubbish though. If you live and breathe in Elements then this might be an acceptable permanent solution, but if you use it only occasionally you might want to just adjust your display resolution temporarily.
3. In the File Explorer go to C: Program Files > Adobe > Photoshop Elements 2021 and find the PhotoshopElementsEditor.exe application. Right-click on the icon or filename and choose Properties. Select the Compatibility tab, and under Settings click the Change high DPI settings button. Under High DPI scaling override, click the checkbox next to Override high DPI scaling behavior. Then select System in dropdown menu for Scaling performed by: Click OK to close that dialog, then Apply before you test whether this works for you.
I find this solution works well for very old versions of Elements, but is not acceptable in the case of Photoshop Elements 2021. The font-size is still small and the interface becomes very blurry, but it's something else you might want to try out.
In the end, after finding Photoshop Elements' sister product Premiere Elements to be even more affected by this issue, I gave up and bought a new pair of prescription glasses. That's a bit extreme but one I'm now very happy with 🙂