No, it's not your imagination about the gameplay smoothness. There's something called frame pacing, which aims to smooth out the large difference in frametimes and leads to a subtle, but noticeable improvement in smoothness.
I noticed this back in 2009. I was an AMD user then, having a HD 4870 which had good performance for the time. I did notice little glitches during gaming though, usually nothing too serious, but niggling. I then bought the legendary GTX 8800, used, for a small price, to play around with.
Compared it to my AMD card and couldn't believe what I saw. Sure it benched a fair bit slower, but the game still ran better for most of the time, feeling more fluid and even and I noticed much less glitches. I also liked the NVIDIA control panel with its superior features. And that was it, the HD 4870 ended up on eBay while I replaced it with the GTX 285. This was faster than the HD 4870 and did all that the GTX 8800 could and then some. Never looked back since. No wonder NVIDIA cards cost more.
I'm not normally into overclocking my graphics cards as the GPU is stressed out enough as it is (especially heat) but overclocking continues to work well with NVIDIA cards, even though the extent is now limited by NVIDIA. My new Palit GTX 1080 GameRock, runs so cool and quiet that I'll be giving it a go.
Definitely get a new Pascal card of some description and enjoy Fast vsync and other benefits like lower heat etc. Just check out the NVIDIA reviews on TPU and you'll see what I mean about their performance - just jump straight to the conclusion for an overview and then stretch to the best NVIDIA card that you can afford. You won't regret it.
No it's not. The GPU's framerate varies dramatically from second to second so will (hopefully) be above 60fps a lot of the time. Fast vsync then does its thing and animation looks great. Your argument only works if it's managing a maximum of something like 55fps, but that's gonna give crap performance regardless and should be either upgraded or details lowered to bring it above 60fps.