Given your example pics I don't see a reason not to leave it in color mode with IR off (although maybe it uses a faster exposure in B/W?). If there is trouble, one of the details police like to know is color.
If using Blue Iris, plain old H.264 is best because that is supported with hardware acceleration. Otherwise H.265 or H.265+ should be better (not sure what the difference is besides that some players might not like H.265+).
If using Blue Iris, plain old H.264 is best because that is supported with hardware acceleration. Otherwise H.265 or H.265+ should be better (not sure what the difference is besides that some players might not like H.265+).