[Neil Jones]

Do you need to use Handbrake for a smaller file?

You'd probably do better to MakeMKV it and then Handbrake from that, if you need a smaller file - MakeMKV will generate a massive file (to the size of the original media, so up to 4.7Gb/9.4Gb for single/dual layer media), but it doesn't compress it any further than it already is, whereas Handbrake will squash the bejesus out of it and then some more.

MakeMkv can rip DVDs to ISO as well (can't do Blu-Ray but it will make DVD ISOs). That'll give you the "digitising" of which you speak, and VLC will play the ISO, so you get the best of both worlds with one application.

I had this picture problem if you rip a DVD directly from Handbrake, and if the source was videotape material - it was fine with film inserts/movies, but it made a hash of videotape material, as Noggin explained at the time:
www.tvforum.co.uk 

Since I wrote that post I have since gone back to this project (after buying a 4Tb drive in the sales) and I'm now ripping DVDs to ISOs and Blu-Ray to MKV files. I used to use a Pi for playback but I wanted an all-in-one solution so I have now a Firestick 4k with Kodi sideloaded on it. It works and I'm happy.