Sorry, didn't get back 'til just now. You've been busy.
Lemme see, and I don't want to give too quick an answer. Personally, since it's a VHS capture and your bitrate is so high, I think it could stand a little compression. What do you have, about 7.5 Gigs, and the audio's PCM, UNcompressed, right? Now you have some practice how about starting over?
Go to TMPGEnc -> MPEG Tools -> Cut/Join. Join the two original files, save out a new one. Check it on a software media player like Videolan or Media Player Classic. It's good? Demux it. Convert the WAV to AC3 in ffmpegGUI, a bitrate of 224 or over should be okay.
Open TMPGEnc DVD Author -> Create New Project -> Add Files. First add the m2v, then the ac3. The short way from here is: Chapter cut/edit -> Add -> Automatically insert chapters with the selected interval. How about 5 minutes? OK, now output, make sure create DVD folder is checked. Hit "Begin Output". When done, open the folder in DVDShrink (get the latest version) and it'll automatically compress to fit on a DVD5 blank. Burn it.
If you want to make a menu and select chapter points yourself, look here: http://www.doom9.org/index.html?/mpg/tmpg-dvdauthor.htm
That's what I'd do. Good luck.