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Edit: Stupid question but I'll ask anyway; you do have a good SSD (like NVME), right?
You can play the game fine at other refresh rates (and use VRR), but only 60hz & 120hz with vsync will give you that arcade machine super smooth game play.
WRC Generations on maximum settings is very GPU demanding (much more than WRC 9 & 10), you will have to selectively turn down some of the settings to get better performance. Some of those settings you wont notice any graphic fidelity change - especially at high speed!
Should also mention that Replay mode will constantly drop out of sync and become a microstutter fest - no setting changes will fix this (only a bug fix, which seems very unlikely at this point unfortunately - guess we will have to wait for V-Rally 5...).
Have you tried this guide:
User Config Guide (Optimization, FFB, Additional Settings):
https://steamcommunity.com/sharedfiles/filedetails/?id=2971134927
Any guides optimising KT Racing graphics and physics engine should work (its used in multiple games).
You will typically get stuttering after a driver update as the shader cache usually has to be recreated.