As an update, I am in fact able to output to mp4 format keeping the 1920×1080 resolution. The file seems less grainy and full of artifacts as before, but it still outputted to the size of 128 MB. Not sure if it’s to my liking let alone my client’s, but I’ll give him an update on the picture quality.
In the meantime, any input on the compression procedure, MPEG Streamclip vs no MPEG Streamclip vs another third party software, is appreciated.