Is there a better way to display VHS sourced video on a modern HDTV?
 

Steve Hoffman (a famous music industry mastering engineer) explains is job in a unique way in a interview online:
"I have an example I use to help people understand what mastering is: pretend the Louvre has lent you the Mona Lisa and you're going to invite your friends over to see it. Your first inclination is to run right out into direct sunlight to see it, but when you do you see dust and cracks of the ages more so than the painting. So, you want to hang that picture and you want to light it in a way that makes it look best. That's what mastering is. You take an individual song and do whatever it takes to make it shine"

How do you do that to VHS today using an HDTV?

In retro gaming many people swear by crt filters & shaders to better approximate what the games should look like on their TV.

VHS wasn't made for modern HDTVs. Assuming I have a digital video transfer of a VHS tape done by Lord Smurf himself, what is going to make it look as good as it can on a modern HDTV? TV settings, outside filters, etc...?

If it's already de-interlaced there is nothing you can do besides standing as far away as you can from the TV set so you don't see the ugly details. If it is not de-interlaced then it depends on the quality of your TV, Some TV's are bad at de-interlacing interlaced contents, In that case a high quality AVR can do the job.

I use Potplayer on a PC and shrink the player for bad quality videos.