Oct 2022 macOS 12.6 Solution

Adding another solution to the list. Imron Gamidli's solution got me the closest to what I wanted with the toggle behavior.

Here is my script which I've added as a Raycast command so that I can trigger from raycast or assign a keyboard shortcut.

#!/usr/bin/osascript

# Required parameters:
# @raycast.schemaVersion 1
# @raycast.title Toggle Resolution
# @raycast.mode silent

# Optional parameters:
# @raycast.icon 🤖

set monitor to 2
tell application "System Preferences"
    activate
    set the current pane to pane id "com.apple.preference.displays"
    delay 2
    tell application "System Events"
        tell window "Displays" of application process "System Preferences"
            click button "Display Settings…"
            delay 2
            click row monitor of outline 1 of scroll area 1 of sheet 1
            click radio button "Scaled" of radio group 1 of sheet 1
            set elems to entire contents of UI element 6 of sheet 1
            try
                set selected_button to button "Resolution5, Selected" of UI element 6 of sheet 1
                click button "Resolution1" of UI element 6 of sheet 1
            on error
                click button "Resolution5" of UI element 6 of sheet 1
            end try
            delay 0.5
            click button "Done" of sheet 1
        end tell
    end tell
end tell
# The next line is optional and could be commented out by prepending with a hash (#).
delay 2
quit application "System Preferences"