Higher bitrate isn’t going to magically get you higher video/audio quality. There’s a point of diminishing returns. You just get a larger file size. For SD, anything more than about 2.5 Mbits is visually indistinguishable.
Yeah, DVD can handle better than what’s on the existing discs. If better quality were viable and noticeable with the copies they’re working with it probably would have been in the previous releases.
The ‘more episodes per disc’ thing is definitely true, though. A dual layer BD is 50GB. A dual layer DVD is 8.5GB. If the existing DS9 release fits a season and special features on seven DVDs, then if the discs are dual layer and completely full we’re looking at two dual layer BDs for that entire season. Potentially one BD, depending on how much free space is on the existing DVDs.