I don't know if I can actually help you out by editing your sprite, due to the huge amount of flaws it has, so I decided to make a mini-tutorial instead to show you how to do it RIGHT;
You see, when you outline it like that, it'll be full of flaws. Jagged edges, nasty black lines, and it won't come out the way you want it to at all.
So, instead of outlining a 2x sprite, this is what you do instead;
Step 1: Resize the sprite you're using to 2x size. Map out the palette, and then color over the entire sprite with a color that stands out opposite from the background. I used yellow because it helps me focus more on the edges because it doesn't blend in with the background at all.
Step 2: Once you resize your sprite, smoothen the edges. Use the original sprite as a reference if you need to. Remember that your sample sprite is a
reference; don't rely on it throughout the whole process. Don't try to nail it shape-by-shape, because chances are it'll end up looking really ugly and awkward.
Step 3: Once you've smoothened your edges, start mapping out your colors. Again, use your reference. Don't stress over details just yet, since all you're doing is mapping out the sprite.
Step 4: Begin the shading process. Use only the colors you're provided. You have freedom at this point, so don't focus on nailing it down to the last pixel; add your own flavor to it if you want, and feel free to shade things a bit differently. Remember to be patient, or your sprite won't turn out the way you want it to at all.
You're pretty much done here.
Step 5: This is optional, but if you wanna add a "true" hi-res effect, throw in what I like to call "in-between" colors. Use these to AA your edges, to add that nice smoothing effect you see in most larger sprites. You can also use in-between colors to add additional outlines and details.
Of course, mine isn't perfection but I decided to make this to help a brotha out.
Hope this helps.