Using your monitor's native resolution and then using the overall downscale from Settings is advised. It downscales each frame after compositing, so elements blend together and almost antialias, preserving more quality. Text readability will suffer though.
Using a base resolution of 720p and having pre-resized your onscreen art assets accordingly, and actually gaming at 720p is the way to deliver the best quality to your stream, as there's no downscale. Downscaling will always lose quality.
Worst is the 'squash in preview' method, which uses a low quality, per-element scaling method that leaves a ton of visual artifacts. Easily demonstrated by having a 720p art asset, and squashing it to 1/4 of the screen, versus a version that you resize to 360p in your preferred image editing program and keep it as the native size when used in a scene in OBS.
(Using the overall downscale is more convenient as well; you can just have one set of art assets, instead of having to generate, import, position, and maintain version-control for one at each resolution level. I do this myself at this point for maximum quality and it's a MASSIVE pain in the butt to keep everything updated properly and positioned correctly for each native-resolution level at which I plan to stream.)
