It sounds like your video conversion wasn’t right, and probably why you have jagginess. The movie is hard interlaced and the fields occasionally go out of sync.
I’m a bit rusty and I’m on a cobbled together PC (not my usual one).
Using DGIndex is right. You need an AVISynth script like this:
assumefps(23.976) #NTSC Speed
spline36resize(720,480) #NTSC resolution
Then you can use DGPulldown to get soft telecine (23.976 -> 29.97).
For the audio, I’d use eac3to. A simple -slowdown option and you can go from ac3 right to ac3 in one step.
But as long as you’re using avisynth it give you an opportunity to try to adjust the black/white levels and colors if you want.
There are no subtitles, so that makes life easier, but if you want to put in the same chapter stops you’ll need to extract and convert them. Somewhere here I’ve got a guide for PAL to NTSC conversion of full discs.