There are four attempts to stream in this log so I am not sure which one of them you are concerned about. The first one is at 720p 30fps in 3500 and the last three are 1080p at 30fps in 3500. The last three will be blurry, 3500 is not really enough to stream 1080p even at 30fps. There is a good article here that explains why this is the case:
https://www.reddit.com/r/Twitch/wiki/guides/bitrate_resolutions_quality
I am assuming you are an un-partnered streamer, as such you should stick to 720p 30fps with a bitrate of around 2000-2500. There are a couple of reasons for this but it's mainly to keep your stream to a level that as many people as possible can watch it without getting into buffering hell.
To improve quality at this resolution the only thing you can do is to change the CPU Usage Preset, configured under Settings, Streaming Tab. As you change this more CPU will be needed and so you need to balance this based on the spare cpu capacity that you have. Start off with veryfast and if you have spare CPU change it to fast or medium. You'll just have to experiment based on the machine(s) you are using to stream with.
