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According to some tests I read, it doesn´t support Shadowplay and Nvidia Gamestream - so I doubt that it´s able to use the NVENC chip that is found on desktop cards.
If I force it to iGPU HW encoding I encounter som strange behaviour were the games start but wont render to the screen. I belive I see a small drop i CPU-usage while doing this but ofcource it's worless when you don't see the game.
As for the Intel Core i7 5500U: It's a good CPU...for a laptop. In terms of performance, it's the desktop CPU equivalent of a Core i3. In both cases, they're dual core that HT for a total of 4 threads of execution.
If I were you, I would try only enabling nVidia GPU for HW encoding with all other HW encoding options unchecked.
Edit: And Yes, we have the latest drivers from nVidia on her computer
I tested just for fun the other way around and when her computer is used as a client HW accelerated decoding works like a charm but as soon as we use her computer as the host and it is responsible for the encoding the CPU throttles. :(