The multiparticle collision dynamics (MPCD) simulation method is an attractive technique for studying the effects of hydrodynamic interactions in colloidal suspensions because of its flexibility, computational efficiency, and ease of implementation. Here, we analyze an extension of the basic MPCD method in which colloidal particles are discretized with a surface mesh of sensor nodes/particles that interact with solvent particles (MPCD + Discrete Particle or MPCD + DP). We use several situations that have been described analytically to probe the impact of colloidal particle mesh resolution on the ability of the MPCD + DP method to resolve short-ranged hydrodynamic interactions, which are important in crowded suspensions and especially in self-assembling systems that create high volume fraction phases. Specifically, we consider (A) hard-sphere diffusion near a wall, (B) two-particle diffusion, (C) hard-sphere diffusion in crowded suspensions, and (D) the dynamics of aggregation in an attractive colloidal suspension. We show that in each case, the density of sensor nodes plays a significant role in the accuracy of the simulation and that a surprisingly high number of surface nodes are needed to fully capture hydrodynamic interactions.