If you edited the 1080 footage into the 720 footage, the editor usually picks the lowest resolution to work with and the entire project becomes 720 by default.
If it happens again, you might want to tell the software to match the 1080 so the 720 gets upscaled.
YouTube does distort from time to time but YouTube will not take a 1080 video and turn it into 720 after uploading.
Great job on the scenery!