You turn on the ‘advanced tab’ in the Handbrake Options/General - the very last checkbox at the bottom.
The black bars are removed via ‘Cropping’:
Load Source Vid, Picture tab, Cropping, Custom. (Automatic can be good, but ‘sometimes’ Handbrake gets overzealous, or not zealous enough - always check it’s work)
View a Static Preview (Handbrake Options, Advanced, Alpha Features, Enable Static Preview. It’s button is on the Picture Tab)(may have to downsize the window a bit so you can see it all) adjust cropping to just take out the black bars top, bottom, left and right, then bump the base rez back up to it’s 1920x1080, or 1920xwhatever resolution if it’s letterboxed.
3200 may be a little low. Try 3750-4250 for that extra bit of Ummmph. You can Direct Play two of those things and still not be over 9Mbps. Not too shabby. Your server will probably deliver as many Direct Play streams as you have upload pipe for - the magic of Direct Play.
A running Preview is always handy to check subs, audio, and video. A nice 120-240 second ‘Preview’ (upper right) gives you time enough to check all it’s bits before the final lift-off.
AAC 2.0 (stereo) is more likely to Direct Play on everything, than anything else, but Dolby Pro Logic isn’t an awful way to go.
DRC only works if the source track is AC3 (I think) and may only work if something is present in the stream (don’t have a clue what). I always leave it on, because sometimes it does work and anytime you can bring the effects down and the voices up it’s a good thing.
DTS is a magnum PITA. I always run those through MKVToolNix for a quick remux/audio fiddle and reduce them to their lossy core, then Handbrake with AC3 Stereo with at least 256k bit rate (48k sample - always), then shoot the final (after Handbrake) through Xmedia Recode (always) (copy video, convert audio) and normalize the audio track to 89db with a bit rate of at least 192k using Fraunhofer FDK AAC LOW COMPLEXITY (this is EXTREMELY important - EXTREMELY!). 128 is fine and will save a little more space, but 192 is just a little better for not much more size. Audio fiddle the least times as possible, of course. A few hundred of those and you’ll be an old hand - and 10 times better than Plex’s stupid transcoder.
https://mkvtoolnix.download/
http://www.xmedia-recode.de/en/download.html
PS: You do NOT want to use the latest Windows version of Handbrake until they fix the custom anamorphic setting routine for DVDs. If you ever want to encode a DVD (and you will at some point) you’ll want to go back to the Guide and learn that section by heart. It’s complicated. So complicated that Plex’s transcoder is absolutely clueless in that regard. If you can create a proper DVD rip you’ll be way ahead of the game because Plex’s transcoder absolutely can not. It will take a perfect 720x480 (or 576 if you’re in PAL lands), stomp on it, vomit on it, pee on it and send it out at 720x404 annihilating it’s 480p (or 576p) base resolution - and when you’re working with SD content you need all those Ps you can get.
In the advanced tab - reference frames are the single most effective time saver, or time killer. The default of 3 is fast enough, but do NOT use more than 5. I never use more than 4. The defaults are fine all the way around and the advanced tab is where you can create material that won’t play on anything, so… the Guide is your friend.