Good to know. So turn off TB and try smooth vsynch by itself?

Very nice pc setup you have there.

Unfortunately there is not much you can do, it comes down to three main factors which sadly affect most online games:

1. Your system specifications itself. For this one there is pretty much nothing you can do at all, your system is very nice for specifications. There are some potential 'hang-ups' that can have undesired effects which can cause stuttering, etc. in any game, not just online games...

Forcing High Priority does not do much these days, other than create the potential for a blockage of data needing to be dealt with by the OS due to the game being held at a higher priority than other processes. That data needs to be handled by the system at some stage and could cause some stuttering in games and applications if it is being pushed aside due to elevated process assignment. That being said, the situation for interference to an applications performance is almost guaranteed to be zero at all times as your system should be able to handle anything that is thrown at it whilst barely breaking a sweat.

ZoS can only try to assist you with creating exception rules to anti-virus programs (They generally just tell you turn off your AV program, bad habit of companies to do that and it shows laziness on their part) Other trouble-shooting methods can be to clean-boot, turning off background processes, etc.

2. Connection speed and quality, your pc sends data to the server, the server acknowledges that data then sends your pc data in the form of an update. If either sender or receiver is under load then that data is put into a priority order to process list.

Given your pc specifications network connection, there is not much you can do at all other than monitor closely your network activity over a number of game-play sessions to define if anything else is interrupting, if you have packet-loss, etc. whilst in game play... Then adjust your system process list order, services running, etc. to accommodate and alleviate any potential 'block' that is causing an interruption to network traffic, things like Updater services, Anti-Virus Updaters, etc.

All ZoS could really do on their end is increase response time, or 'tick' as it is commonly referred to, given the number of potential players in a single area it could be detrimental to overall experience of game play for all (The higher the tick-rate, the more data the servers have to handle, which means the servers have to work harder) In small scale situations it would be a noticeable improvement when a lot of data is being transferred, which you would directly see as an increase in network activity.

3. Further optimization for more powerful processors and video cards. It is not so much the game is not optimized well...

As developers and producers of a pc game, they have to cater for a massive range of varying hardware, not company could afford to develop a game if they tested all the components available in test setups, which is why these days we are seeing so many more titles being console ports, it is not hard to imagine how much easier and less time consuming it would be to develop an application that is hardware intensive for a specific build of components.

Most mmo games are quite script/code heavy, especially with a lot of players on the screen at the same time. ZoS has done a remarkable job for the quality of the product they have provided to date. In saying that...

ZoS really does need to re-do their thread code, allowing for multiple thread usage, not just for rendering, just about every system can handle it, even systems that are pushing ten years old would benefit to a degree. It is quite frustrating in this day and age to have technology that is not even close to being fully utilized.

This isn't just a x64 bit executable request, it is a request to allow currently generation technology to really shine, it isn't like your re-writing the entire engine... Just the thread ordering code to allow those that can run around on ultra really run around on ultra.

An idea for multiple thread activation, based upon pc scoring via Windows Performance Index tool, the information is right there for you, provided by the OS:
Minimum specification pc:
As is currently, one thread for rendering, one thread for networking, one thread for scripts, etc.
Middle specification pc:
Weighting towards gpu/cpu, whichever is higher in scoring.
Higher specification pc:
Same as above, just more bias to performance throughput via enabled threads.
Ultra specification pc:
Unleash the beasts that we have and (most of us) slaved for!

It really is frustrating to have spent thousands of dollars on components to get not much more than current-gen console quality...

Gone are the days of pc games being benchmarks (Crysis 1, I could run it at an average of 3-7 fps) which is really sad as the amount of investment that we as pc gamers pour into our systems is what drives the gaming industry, as well as so many others, for example, you wouldn't be watching television in HD or 3D if it wasn't for gamers.

Processor Intel(R) Core(TM) i5-2500 CPU @ 3.30GHz 7.6
Memory (RAM) 8.00 GB 7.9
Graphics AMD Radeon R9 200 Series 7.9
Gaming graphics 7924 MB Total available graphics memory 7.9
Primary hard disk 73GB Free (210GB Total) 7.8

Some links for reference:
General information on Windows Experience Index:
http://en.wikipedia.org/wiki/Windows_System_Assessment_Tool
Core processor performance rankings based upon Windows Experience Index:
http://www.drivermax.com/driver/vista-rating/index_cpu.php
Video card performance rankings based upon Windows Experience Index:
http://www.drivermax.com/driver/vista-rating/index_video.php
Windows Experience Index was removed in 8.1 due to the graphical user interface being removed by microsoft, you can still run it though:
http://www.myfavoritegadgets.info/tipstricks/WEIwin81.html
WinSAT reference:
https://msdn.microsoft.com/en-gb/library/ms737395.aspx

System should have no issues based on the specs provided.

I assume you have sufficient cooling with overclocking set up, yes?

Moving physics to the CPU shouldn't matter. Physics are already CPU based. (ESO uses their own physics engine and not the PhysX build into Nvidia's cards. Damn shame, too.)

(BTW, Nvidia's PhysX engine is specifically engineered for that purpose, and that purpose only - you're unlikely to find a general purpose processor that will come close, even one as beefy as yours.)

What I would recommend is two-fold:

1. Go into GeForce Experience and disable the Nvidia Streamer service, unless you're actually using it to stream. Something in the way it hooks into networking makes it disagreeable, at best when running ESO.
2. Go into services.msc and stop/disable the Nvidia Streamer service. (I know..."Didn't I just do that?" Yes, yes you did. Nvidia, however, disagreed and it's still running as a service in the background.)

Beyond that, you can check your firewall incoming/outgoing connections and see if you have something running, taking up bandwidth, that does not need to be. You can generally Google executable/service names for information if you don't recognize them outright.

Regarding AntiVirus, tagging the entire ESO program folder as "Safe" or "Allowed" (after a scan, of course) should be the most you should require.

Never disable your Antivirus for an online game unless you want your beautiful system to do all kinds of new, neat, slow things.

It's likely you do not need an exception in your firewall, nor on your router for ESO, either. Place it in Game or Quiet mode and that will help some.

Check task manager for other things in the background as well.

Last suggestion, roll back your Nvidia driver, then reinstall the newest one using a Clean Install. This will clear out any artifacts and give you a good driver set.

Repair ESO via Client, just becuase, reboot, and see if your world runs a little smoother.

(Make sure you kill the launcher app, too, after the main has started. That, or simply load eso.exe directly from the folder, unless an update is required.)