You are rendering from a compressed format back to a compressed format in the most unsuitable app on the planet. Seriously, use image sequences. And all your Gamma issues can be resolved by reading up on that stuff and using color management.
image sequences are an option but quite cumbersome because in every case we have to go back to video for broadcast.
The main problem seems to be the AME in Photoshop. Take uncompressed video or image sequences and render it to ProRes or other codecs
you get in Photoshop allways the same loss in resolution. If you take Final Cut for that job you have no loss in quality. We wonder if all Adobe Programs using Media Encoder have this problem.