If you know a player that can render DRMed video with the GPU instead of desktop mode, I'd be very interested to know about it, the official R18 player certainly can't and using GPU encoding won't force it to do so.
Using a lossless temporary files is simply a means to be able to use any encoder at any settings you want without having any limitations. It does take minimum twice as long as encoding it directly, so if time is a factor it may not be the best option, but if time isn't a factor, you can't get a better result.
I do agree it may not be worth it with the low bitrate DMM videos, but I personally prefer to always do things the best way I can, even if it takes longer.
Hardware encoding can't be better than software encoding, but it is a lot faster. So the worst thing possible about my way of doing things is that it will take at least twice as long to encode, but it certainly won't look worse than your way.
You're missing at least a word in the first sentence of your last paragraph, but I'm assuming you think I laughed at you somehow because I pointed out that some of what you said to me in pm was inaccurate(you're also having a dropped frame issue with your encodes, the visual quality of them has nothing to do with it) and we have different opinion about how to encode something, but I assure you I wasn't. If you have something constructive to say that would help, I assure you it is very welcome, but you have to be able to take it properly if you're proven wrong.