You can have small file size, or good quality. Choose either ONE ????
3 to 5mbps is already very low for HD video. By using 2-Pass VBR, you can maximize quality, but you can only squeeze so much out of it. At the SAME bitrate, although 720p is lower resolution than 1080p, the perceived quality should be better since you have less pixels to compress into the same space.
Is there a reason you can’t take advantage of FREE hosting on YouTube or Vimeo perhaps, where you would have no quality limitations imposed by potential cost? Maybe this is a training video or something that you are charging for, so I can understand bandwidth concerns there.
Good luck meeting your goal
Thanks
Jeff Pulera
Safe Harbor Computers