This work experimentally explores the important application of the enhanced self-phase modulation (SPM) effect for the generation of high average power and high peak power femtosecond laser pulses in an all-fiber mode-locked laser oscillator pumped by a single-mode laser diode. Depending on the utilization of a section of nonlinear spectral broadening fiber with a 4.2 mu m mode field diameter (MFD) and the optimization of the polarization-maintaining (PM) fiber length in a polarization-based all-fiber Lyot filter, the oscillator delivers 350 mW of average power at a 46.2 MHz repetition rate, resulting in 7.5 nJ pulse energy. The laser produces SPM-broadened spectrum and the spectrum features symmetrical multi-peak distribution. The resulting compressed pulse duration and average power are 107 fs and 271 mW, respectively, which corresponds to 54.8 kW of peak power. Additionally, comparative experiments have also been performed by replacing the nonlinear spectral broadening fiber with equal-length standard fiber with 6.2 mu m MFD and shortening the length of the 45 degrees aligned PM fiber of the all-fiber polarization-based Lyot filter, respectively. The presented experimental scheme demonstrates a notable improvement in terms of average and peak power compared to conventional experimental methods. Simultaneously, the experimental scheme also shows that the enhanced SPM effect in a mode-locked fiber laser oscillator has important application value for minimizing pulse duration and lowering the mode-locking threshold.