There's not a lot to do about the VHS, unfortunately. Any discs you play will be significantly degraded through the digital/analog/digital process of using the converter, though. You can eliminate that by having a player with an hdmi output.
Glad to help.
BTW, if you get a new Blu-Ray/UHD player, it'll have an hdmi output, and that will give a significant improvement in image quality of anything you play with it compared to using the converter. Sorry that wasn't mentioned prior to getting a converter. You can get Blu-Ray players...
Actually, you're making it more complicated, not less. Receivers are designed to do the switching for the entire system. Mixing that between the the receiver and TV makes things a lot more messy, which is what you're discovering.