Okay, you are learning ! i guess i made the same mistakes when i started, but you learn from your mistakes, and it only gets better, with Davinci Resolve once you "Deliver" you're in the Custom preset or H264, (I use Custom)
And set "Quality "from"Quicktime" to "MP4" so you get the MP4 extension instead of the MOV extension, codec to H264" and change the "automatic" option to "restrict to" and set the value to 1500 this is a good value for VHS, which leaves quality intact, and does good compression (makes the file smaller) you can change that value depending the result you get, a bigger value makes quality better, and the file larger, and visa versa...(try keep the original source frame rate, a lower frame rate will make the file smaller, but can have side effects you don't want)
(check also the settings [in the lower right corner cogwheel], if the resolution settings are the same that you have set in the previous left section)
(btw. i don't use H265 because it degrades the VHS quality too much i think, it's a stronger compression, H265 is mostly designed for 4K footage, to make smaller files, and for better streaming performance, with the same bandwith/datastream)
The other software i also use and like, MacX Video Converter Pro, which is easy to use if you just want to convert and change/edit minor things, like cut parts, or change aspect ratio by cutting parts of the image or mask, or change sound codecs, Uniconverter is also like that, but has more codec options, is also easy to use, both these programs you have to pay some money for, not much, i think it's worth the money you spend, some updates to these programs cost money, but if your happy with it, you don't have to do these updates, i stopped updating, and am happy with it's use.
Resolve is a fine editor, it's free, while others with same options are not, there are lots ot youtube tutorials by users, for the different features of Resolve, and while it's professional software, it's still easy to use, is my opinion.
Try to discover the transform and crop options, these are handy if you want to remove the typical VHS tape "dirt" you see in the lower portion of the screen (video head switching signals).
Capturing by Component video will show more detail, which also mean that you see more noise paterns that a normal CRT did not make visible, this noise will be less visible once compressed with a MP4 codec.
Also the orginal recording will make a difference, a broadcasted movie or a video studio recording will result in different quality due to interlace artifacts interlaced "footage" will be made progressive once it's digital,
a movie frame may view better because the two fields are the same in one progressive frame while a video source frame can have two different "fields" because the time it took to make one "field" takes time and the second field is different because of the fast movement of the image between those fields, i hope you can follow this,
it comes down to that you try to make the best of it, with the source material you've got.
Capturing from composite makes the image slightly softer, which makes the image more washed out, (less resotion) which some people think is nicer to see, but color seperation is worse, red colors will fan out into the other part of the image, and gives a kind of prism halo on sharp edges, this effect is less with s-video, but still there, I think capturing through component video is the best way to do it, but component video made it's introduction very late into professional analog video, it came with the rise of digtal video also with MPEG encoding and decoding, hence ... DVD
