Guys, the problem is partly the memory allocation you give to Parallels (if you give more, it can do more) and partly because Parallels does not (cannot) address the GPU onboard your Mac. Instead Parallels creates a virtual graphics card emulator. Unfortunately, the GPU parallels uses is quite an old one (it seems to behave like an Nvidia 7XX series).
FIXES TO TRY: in settings Harware/CPU & Memory, push the number of processors to whatever Parallels recommends (typically half of the processors available), and increase the memory allocated to Parallels to the maximum you can safely release (typically at least half of what's available to your Mac, and preferably more). Then, in settings, Hardware/Graphics, check that Memory is set to 'Auto (recommended)'. Parallels tell me that this means it can allocated (much) more than the usual 2GB max graphics RAM limit, by stealing system memory, if it needs to.
PROBLEM SOFTWARE: I'd been trying to run Microsoft Flight Simulator (MSFS) released August 2020. It runs perfectly on Boot Camp. And it will start using regular Parallels, and then crash before the menu screens. However, MSFS will kind of run with Parallels Pro, and the settings changes made above. The problem now is that MSFS under Parallels really struggles with any graphics intense tasks. So clouds, literally any clouds, flash and flicker on and off every 2-5x seconds or so. Don't play this game with Parallels if you suffer epilepsy ok. To re-iterate, this game is smooth as silk, on the same Mac, using Boot Camp.
The game dev, Asobo, explain that this clouds issue is a known problem that only affects low end graphics cards, specifically the Nvidia 7XX GPU series. So it feels like the current version of Parallels emulates one of these older 7XX cards.
SOLUTIONS:Short term solution is try the fixes above and fly on super low settings. Always clear skies. Without clouds. Long term solution would be for Parallels to update their GPU emulator to a less ancient card... which will only happen if enough of us need it and ask...