Blended films comprising poly(butyl acrylate) (PBA)-grafted cellulose nanocrystals (CNCs) and poly(3-hexylthiophene) (P3HT), exhibited more intense photoluminescence (PL) and longer PL emission lifetimes compared to pristine P3HT films. Optical absorption and photoluminescence spectra indicated reduced torsional disorder i.e., enhanced backbone planarity in the P3HT@CNC blended composites compared to the bare P3HT. Such molecule-level geometrical modification resulted in both smaller interchain and higher intrachain exciton bandwidth in the blended composites compared to the bare P3HT, because of reduced interchain interactions and enhanced intrachain order. These results indicate a potential switch of the aggregation behavior from dominant H-aggregates to J-aggregates, supported by Raman spectroscopy. The reorganization of micromolecular structure and concomitant macroscopic aggregation of the conjugated polymer chains resulted in a longer conjugation length for the P3HT@CNC blended composites compared to the bare P3HT. Additionally, this nanoscale morphological change produced a reduction in the highest occupied molecular orbital (HOMO)-lowest unoccupied molecular orbital (LUMO) energy gap of the blends, evidenced from optical absorption spectra. Classical molecular dynamics simulation studies predicted the probability of enhanced planarity in the polymer backbone following interactions with CNC surfaces. Theoretical results from density functional theory calculations corroborate the experimentally observed reduction of optical bandgap in the blends compared to bare P3HT. The blended composite outperformed the bare P3HT in nitro-group PL sensing tests with a pronounced difference in the reaction kinetics. While the PL quenching dynamics for bare P3HT followed Stern-Volmer kinetics, the P3HT@CNC blended composite exhibited a drastic deviation from the same. This work shows the potential of a functionalized rod-like biopolymer in tuning the optoelectronic properties of a technologically important polymeric organic semiconductor through control of the nanoscale morphology.