A good-looking report will put me in the mindset that you took the assignment seriously, and aimed to turn in quality work. I think that counts for something, not nothing.
That said, if a report is just that – good looking, with little substance behind it – I will see through the façade very quickly, and all those superficial niceties might even count against you.
Assuming that's not the case, though, if two people turn in equally good work, yet one is formatted much more professionally than the other, that might earn an extra point or two – assuming I'm grading with some level of subjectivity, and not merely following a strict rubric. Shame on me, though, if I let mere appearance carry much more weight than that.
That all said, your classmates seem to be very shortsighted. Okay, maybe your extra effort will get you a 94 instead of a 93. Or maybe you'll just get a 93, with nothing more than a mental note that I thought your report looked really good. However, what you do in my classroom might – and perhaps should – extend far beyond my class. Presumably, you're in my class for an education, not merely for 3 or 4 credits. Get in the habit of turning in good work, and that might turn into something that translates into a valuable life skill.
One more thought: what's going to happen after you graduate, when all those folks from human resources ask you to include the names of three professors on your job applications? One of them might well call me, and ask, “What do you remember about this guy?”
Perhaps I'll answer, “Oh, I remember him. He always turned in exceptional work.”
Those two sentences might prove to be worth far more than an extra point or two on an assignment.
Incidentally, I had one student bring her term project into a job interview. They hired her, largely based on what they saw in that class project. Just a couple weeks ago, another student asked if my name could be listed as a reference.
“I hope they call me,” I replied in my email. “I distinctly remember how your work always seemed to go above and beyond what everyone else was turning in.” Imagine how that will sound in the ear of a corporate recruiter who is sifting through a pile of job applications.
It's your call. It's also your future.