If you elect, oh, 5 people in each district then your proportionality is still granular to about 17% of the vote in the district (for single member districts it's granular to about 50%, of course). And your districts are 5x as large as single member districts are for the same number of representatives. What it does give you though is better electability for local independents.

With mixed-member proportional you can easily get down to couple-percent granularity while maintaining medium-size districts (typically twice as large as single-member).