Olympus E-500 has a
8.0MP Four Thirds (17.3 x 13 mm ) sized CCD sensor . On the other hand, Olympus E-M10 II has a
16.0MP Four Thirds (17.3 x 13 mm ) sized CMOS sensor and features TruePic VII processor.
Olympus E-M10 II's sensor provides 8MP more than Olympus E-500's sensor, which gives a significant advantage in real life. You can print your images larger or crop more freely.
On the other hand, please keep in mind that Max sensor resolution is not the only determinant of resolving power. Factors such as the optical elements, low pass filter, pixel size and sensor technology also affects the final resolution of the captured image.
Below you can see the E-500 and E-M10 II sensor size comparison.
Olympus E-500 and Olympus E-M10 II have the same sensor sizes so they will provide same level of control over the depth of field when used with same focal length and aperture. On the other hand, since Olympus E-500 has 99% larger pixel area compared to Olympus E-M10 II, it has potential to collect more light on pixel level hence have less noise in low light / High ISO images.