Basically my problem is that when im recording minecraft, the screen goes is low quality and if i try fix that the frames in the output file goes choppy/frame skips in the video.
1080p60 at 3500 Kbps tends to look like that. Downscale to 720p30 instead, lower your bitrate to 2500, and cap your Minecraft FPS at something reasonable like 60. If you're just recording then you can stay on 1080p60 but adjust your other settings according to https://obsproject.com/forum/resources/how-to-make-high-quality-local-recordings.16/
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