You'd have to define 'grainy'. Generally you'll want to record using CQP, with no downscale. CQP 22 is generally good-enough for most applications, CQP 16 is visually lossless. CQP 12 and below should not be used without a very specific reason, as filesizes get HUGE.
Past that, Windows 7 is end-of-life, and so now is unsupported and below the minimum requirements for using OBS. We can only really recommend upgrading to Windows 10.