Converting Mini-DV to .mp4 H.264

I have a number of Mini-DV tapes I'm importing using iMovie v9.0.9 from my old Sony Mini-DV camcorder (DCR-TRV14E - PAL). I'm not too happy about the files using 13Gb per hour of drive space and when I consider these are only standard def home movies and my iPhone 5s can produce HD vids at a much more acceptable size then I'd like to get these movies down to the similar file size.

So I'm looking for help around converting the files to H.264. I'm guessing handbrake will be the easiest way to do it. Any tips on settings would be good, but my main question is about using this new files in iMovie.

Should I delete the existing .dv files before importing the converted files as I don't want them duplicated or cause confusing as to which clip is which. Will iMovie have any problems using these new version, can I still edit the clips, while doing a bit of digging there were some comments about H.264 not being editable, yet I can edit iPhone movie clips, so I'm bit confused? Will they keep the original timestamps as I like the way the Event Library keeps all the clips in date order?

Cheers!