If the game is only playing in 720p and you can't force settings higher in the system options then:
Your TV likely doesnt support that resolution. There is a large difference between 1080i and 1080p.
1080i has resolution -> 1680x1050 pixels (16:10 format)
1080p has resolution -> 1920x1080 pixels (16:9 format)
Now there are a large number of manufacturers of TV's that like to quote "HD" or "FullHD" in the TV specification when actually they only output 1080i - not 1080p. Check the TV specs for the ACTUAL pixel dimensions...
A lot of games dont support 1080i anymore and only jump from 720p -> 1080p.
I also wouldnt be surprised if your not using HDMI then that may affect it too. Please remember that the Xbox 360, PS3, PS4 or XBOne cannot actually output native 1080p. (The PS4//XBone might be able to at some point).
All the current consoles upscale resolution to 1080p they can't actually produce 1080p - so there may be a problem in system settings regarding upscaling, not sure though as I've never had an issue with any game on my PS3 and I primarily game on PC now.