am I missing something here?
Yes. Basics of rendering and encoding. A quick excursion to the help files and looking up respective info on the web about formats and CoDecs might be a smart thing to do.
Please spend a little time learning about a very complex app. If you plan to work in video you must take the time to learn about video formats, compression, frame rates and frame sizes. Video has standards that must be understood. AE is like any other professional software designed from the start to give professionals tools to solve problems. The product home page has some excellent training materials. Basic AE
You cannot just jump in and start fiddling with the controls and end up with guaranteed success any more than you could just jump into the seat of an F-18 and successfully take off and then land on an aircraft carrier in the middle of the night in a storm just because it has an autopilot button or you played a video game or saw someone do it on TV.
When you want to learn something in AE the first step is to type a word like rendering or exerting in the search help field at the top right corner of AE and study up. If's also a good idea to check the FAQ sections of support forums like this one: