Hi there,
As you’ve already noticed, transcoding is indeed a trade-off between filesize and quality. A good starting point for 1080p is probably around 23 or 24 crf. You can go up or down from there, or add a cap on the max bit rate as you suggest, depending on how happy you are with the quality-to-size ratio.
Support for h265 varies between browsers, but you might be able to play it depending on your setup.
Hope that helps.