First of all I want to thank you for helping me.
Second, I decided to do a test by moving the card from the streaming pc and into the gaming pc. I then plugged the streaming pc's hdmi into the card after installing the drivers and opened up obs and added the device as you normally would. During the preview on the stream pc I was already getting video lag which got worse with recording/streaming. I streamed a 5 minute gymkhana video(if you haven't seen any of them they are very fast paced) and had no issues what-so-ever with the video while using the card in my gaming pc. framerate,quality, ect was all top notch and smooth as silk.
Now to me this confirms this: 1. The Elgato card is fine and has no issues. 2. My obs settings are not the issue and 3. There is something not performing properly in my streaming pc.
I know my gaming pc has slightly beefier specs, but the performance difference of the 8320E(stream pc) compared to the regular 8320(gaming pc) is not drastic enough to cause this much of a difference(even though the gaming pc is overclocked). The only thing I can see making a difference would be the rendering performance considering the gtx 1070 vs integrated.
I admit the motherboard in the streaming pc was a factory refurbished motherboard and I did forget to mention that when I installed the hd60 in the streaming computer I was getting wierd audible noises coming from the hardware itself that only occur when using the pci ports(confirmed same symptoms on both pcie ports on the stream pc motherboard). This did not occur at all when installed in the gaming pc. So while I still think I may need a low end gpu to help out the rendering side in the long run, I think I may have a bad motherboard on the stream pc causing the entire system to have performance issues.