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265 is more bandwidth efficient than 264. If you put two video streams next to each other, 100% identical, running at the same bitrate, except one is H.264 and one is 265, 265 will look better.
265 can achieve the same visual fidelity as 264 at 20-40% lower bitrate, depending on a few factors. The trade off is you need more processing.
If either are looking pixilated, you're getting ones with to much compression. I still try and get ones at around a gig or larger. Especially if you're watching on a big screen. And like I said, if your hardware will run it without getting all laggy, 10 or 12 bit is good for rgb color depth