do you think a better cpu would help it?
To some extent, yes. The CPU preset is set to
veryfast by default in OBS. You already lowered it to
faster.
You can try changing it to
fast. But Overwatch is already a fairly CPU intense game, so I suspect you will start dropping a lot of frames.
A slower setting means the encoder will work the video more to optimize the compression. In practice that means your stream will look better at a
faster preset than a
veryfast preset at the same bitrate.
Each step down is quite a big step up in CPU power, and may not give a very big improvement. But of course if you want to maximize quality you're going to want a really beefy CPU :) That's also why some professional streamers have dual PC setups - to have one PC 100% dedicated to encoding.
You can try the NVENC encoder as well, which will use your GTX 1060 instead of the CPU. It doesn't have the same options, but it does a decent job. However, it is generally agreed upon that x264 is the best H.264 encoder out there.