I rendered an animation in a 720p-png format and the images looked HQ. After re-rendering them into video in VSE the video lost its quality and looked blurred. (I tried higher bitrates and different formats but nothing worked). How to keep my video quality as good as images?
Rendering with the file format AVI Raw should help you retain your Quality ;-)
But if you don't want to have your file sizes explode try H.264 instead.
You can reduce your Bitrate to 5000 for your 720p video. Change your GOP Size to half your Frame Rate.