Choppy playback on really high-end server when transcoding blurays

Hi all,
I've read a few posts regarding trans-code issues of MKV files. I see that my Plex Server.log is showing on average < 0.6 speed **and I have received **"This server is not powerful enough" message in the web player. I've tweeked the server throttle settings to 180secs as mentioned in a few posts. Still choppy...

I'm just curious if anyone has had success trans-coding untouched rip blu rays? I use MakeMKV to perform the the straight transfer to produce on average these 20-30GB files.

My Server specs, not sure I you can even purchase more horsepower, aside from an enterprise class server.
RAM = DDR2-667 -- 48 GB
CPU = Dual(2x) Quad Core Xeon L5420 2.5Ghz (Passmark Average 6500, https://www.cpubenchmark.net/cpu.php?cpu=Intel+Xeon+L5420+@+2.50GHz&amp;id=1259&amp;cpuCount=2)

Is trans-coding high-bitrate blurays like those encoding in VC1 or MPEG4 or h264 possible? Can I instruct Plex to use more cores via multi-threading? I;m not sure what to try next. Thank you all for your time in reading my post.