I'm guessing this is a question about codecs?

Question

Hello potentially helpful Premiere Pro gods, and thank you in advance. I'm on a timeline and Google is not being helpful.
The following is regarding Premiere Pro CS6
I am trying to do something that should be simple. I know it is possible. For future reference, here is one of a million examples of what I'm trying to do (this video won't mean much until you read the rest): Shatter Me Featuring Lzzy Hale - Lindsey Stirling - YouTube
Specifically, I have a video, about 5 and a half mins long (same length as the one above).
The original files (taken using Dxtory / Lagarith codec), before they get exported by PP (below, left) are clear and readable. The one exported with the supposedly-lossless Lagarith codec (below, middle) is almost half-decent, but still well below my goal standards. The H.264 "YouTube HD 1080p 29.97" (below, right) is pitiful and unusable. Note: These screenshots are unedited but taken from a bigger picture.
My question is simple: How do I get a 5.5-minute-long video of (or very close to) the quality of the below-left picture from Premiere Pro to YouTube? The video I linked to above (professionally-made) has achieved this, and I would like to achieve it also. On that note, how does a 2-hour-long Hollywood video of perfect 1080p crystal-clear quality fit into a 12GB file, when 30 seconds of my (very basic) file exported with the far-inferior Lagarith codec sports a file size of half a GB? That is a size of 1GB per min, which would add up to 120GB for a 2-hour long film, ten-times the space Hollywood takes up in half the quality.
The second big problem is this: The frame rate noticeably decreases when the video is exported, regardless of what frame rate I set, and regardless of what codec I use. I need smooth video like the video linked-to above, and like what is in the original files.

Answer 1

I'm thinking we can narrow down the problem here, and I'm going to take your (very helpful) explanation step-by-step:
Steven L. Gotz wrote:
I don't understand why you recorded at 1280X1080. The Pixel Aspect Ratio of 1.5 is not something I have even seen recorded before. Or maybe you just made the sequence wrong? Or did you actually record that way?
I have never recorded anything in 1280x1080. The source is in 1920x1058. (I recorded the window, not the whole screen, so maybe that's why its not 1080?) Below is the Windows info I see about the source files. Notice 30fps and a 1920 width. From what you're saying, its definitely looking like I made the sequence incorrectly, but I'll get to that below.
...as it is, your sequence indicates a pixels that is not square, and you are asking the software to create square pixels out of it. The quality suffers when you do that. Once you record it that way, create your sequence by right clicking on the imported media and selecting new sequence from clip. That way the sequence will perfectly match the media.
I totally understand the square pixel concept. I never knew you could create a sequence by right-clicking the source file. That sounds way better and easier than trying to match everything manually.
Next, pick a frame rate. If you record at 23.976, export at 23.976, not 29.97. If you want to export at 29.97, then record it that way.
Now to address the encoding settings. I don't remember when the bug appeared or went away, but you are possibly running into the VBR 2-Pass bug. Use a VBR 1-Pass and bump up your bitrate to over 20Mb/s.  Set the target for 20 and the maximum to 25. The encoder will use what it needs to do the job. Just give it the permission by setting it to 20 and 25. The frame size of 1920X1080 really requires more bits to describe the action properly.
If you have a lot of movement in a video, the distance of the keyframes, the frames that have all of the information, as opposed to reference information, should be put closer together than every three seconds or so. Whatever frame rate you use, put the keyframes that close together. Either 24 or 30. The current setting of 90 is fine for most things, but not fast action.
I created a sequence via the right-click method and re-did the export settings. How do these look to you? Do I need to export to a Height of 1058 instead of 1080 if my source carries that height?