A little bit late, but I think I leave a comment anyway:
regarding transcoding:
If you select quality "original" in the player, VLC will not transcode video unless you have a file using x265 codec
To verify: create a batch file which calls ffmpeg with the parameters and dump these to a file.
viewtopic.php?t=22585ffmpeg will however convert the media to a HLS stream - but this does not use more then <10% cpu on my system (8vCPU, Server 2016)
There is an addon to chrome based browsers and most likely also mozilla where you can open the stream (a m3u playlist) in VLC player - sparing you the time to search in the htm code for the link.
If you go into the console under "remote" and set content delivery to "high" then you should have the non transcoding setting selected as default.
if you still have a high CPU load, maybe you system really has not enough CPU to handle the conversion from mkv to hls, and the audio transcoding,
Get a very cheap <100$ nvidia gt730 based card and enable the nvidia acceleration. Even if this nvidia cards CPU is from 2014 if will handle the transcoding of serveral streams with ease (up to 5x real time).
Note: you need a current ffmepg build from the generation 5 of ffmpeg. Newer builds will not work! Also you have to use the ffmpeg batch to replace one parameter for ffmpeg: change veryfast to fast because very fast ist not supported by the nvidia codec. Not all GT730 might be the right choice, because not all use the same gpu. Mine is a passive cooled <50W TFP four hdmi ports made by asus.
You can then even start to modify the application profiles xml and change the medium resolution from800x450 pix to HD1280x720 and use high profile instead of a basic. Makes a big difference regarding quality (in my opinion) if you use serviio from remote and still uses only 2000KBit/s (audio + video).