BD-Rebuilder: To upscale or not to upscale, that is the question.

[hbenthow]

I have a 720p HD MP4 file. Since it is in a non Blu-ray compliant aspect ratio (1280 x 544), it will have have to be re-encoded in the process of converting it to Blu-ray format with BD-Rebuilder.

My question is this: would it be better to author the Blu-ray in 720p resolution, or to upscale it to 1080p (using BD-RB's "Resize - 1280 x 720 to 1920 x 1080" option)?

Also, the file has a 320 kbps AAC audio track, which BD-Rebuilder has automatically converted to a 192 kbps AC3 file (during the preliminary pseudo-BD conversion process). I tried checking the "Use 448 Kbs for AC3 encoding" option, but it still converts the file into 192 kbps. Will this result in a significant loss in audio quality?