If you're asking if Premiere Elements can create a video in portrait rather than landscape, the answer is no. You can't produce a video in Premiere Elements that is taller than it is wide.
As for the quality issue, that depends on the specs of your original videos and how well they match your project settings. Are these videos directly from an AVCHD camcorder or phone? Or are they from another sources (eg, downloaded from the internet)? The original video specifications determine your final video's quality.