Thanks for the reply! To answer the questions:
I am using HTSP but ONLY because i dont see anywhere in TVheadend where i can use Pass as the default stream profile. Old versions had the option, the new versions seem to have this taken away. Apparently we can only use HTSP when streaming to a client from TVHeadend server backend? I even tried to disable the other stream profile to "force" it to use Pass but this disables my capability to stream altogether. I also went into the settings of Kodi front end PVR client and specified that i wanted to use the Pass profile. However this just fails as well stating there isnt any Pass stream profile available (when there certainly is one enabled and ready on the backend).
When i used Hardware Acceleration or Hardware Acceleration - Surface on Kodi frontend using my NVidia Shield i have the same results - very slow laggy HD. When the HD is very slow and laggy Kodi is reporting that i am using about 70 to 80% CPU. I thought this was high but i am using a Shield. Arent these supposed to be able to take anything we throw at them!? If it can play 4k movies it should be able to handle 1080p over the air TV without a problem, right?!