Both Olympus TG-5 and Canon S120 have 12.0 MP resolution sensors but Olympus TG-5's sensor is 1/2.3" (6.17 x 4.55 mm ) and Canon S120's sensor is 1/1.7" (7.44 x 5.58 mm ).
Since Canon S120's has a larger sensor area with the same resolution, this means that it also has a larger pixel area hence better light collecting capacity for a given aperture compared to Olympus TG-5.
Below you can see the TG-5 and S120 sensor size comparison.
As seen above, Canon S120 has a 1.5x Larger sensor area than Olympus TG-5. Larger sensors give photographer more control on the depth of field and blurry background compared to smaller sensor when shot in same focal length and aperture.