Couple of most likely settings.
Re. sharpness/blurriness: set the AF mode to AF-S (front of camera) and in the AF menu the AF mode to single point. Now take a photo with one object in the center covered by the green focus box. That object should be tack sharp in the photo unless your shutter speed is really low (below 1/30th). In the IQ menu set the image size to L 3:2 and the image quality to F or F+RAW.
Re. washed-out colors: press the Q button - set the film simulation to STD (Provia) and make sure that color is set to 0. S-Tone and H-Tone should be no more than -1 or +1 and switch Grain off. Make sure that you set White Balance to Auto, the aperture and shutter speed ring to A and switch on Auto ISO.
With these settings you should at least get 'normal' images. You have to check these on your computer. The LCD on the camera is not very accurate. If you did check the images on the LCD make sure that in the Set Up menu under Screen Set Up, the LCD brightness and color are set to 0.