I'm exporting it to a DVD, I've tried the following export settings:
a) MPEG2 - 720p, 29.97 frames, 2 vbr (target bitrate 12),, Profile:Main, Level: High (1440) (I've tried with & without 'multiplexing' the output, no luck....).
b) MPEG2-DVD - 720p, 29.97 frames, 2 vbr (target bitrate 12), Profile:Main, Level: High (1440)
c) MPEG2-DVD - 720p, 29.97 frames, CBR (10 bitrate), Profile: Main, Level: Main
d) H.264 - 720p, 29.97 frames, 2 vbr, Profile:Main, Level 3.2
Note that none of these are the correct size for a DVD, as Richard said. They are still HD, and a DVD will require an SD size. You want to export/compress once. I am emphasizing this, because your bitrates are too low for your HD material (so pixelated), but they are not relevant, because you need to be looking at rates for SD pixel sizes. Do what Richard suggested, and see what you have.
Yes, you may have a problem with how best to mix 1080i and 1080p, but first see what quality you have for DVD, and whether one of the formats look okay.