Aiming for .mpg files is unusual. They are for MPEG-2 (or MPEG-1). Unless you want to make DVDs, pick something that offers better compression. I’d encode with x264 and make MKVs.
And I’m curious as to what was made at 60fps and put on a tape. I’d be grateful if you’d send me one such file. 😃
EDIT: By the way, the episode has a levels issue but only with the white text on the purple border: the rest of the video looks all right.