Blue Ray to Full resolution*.MP4 high-quality
 

On the Windows platform I would like to convert the principle program stream from non-encrypted blue Ray discs to a full resolution small file size*.MP four using variable bit rate multipass compression; I am not concerned about processing time. I want a full resolution high quality small file.

There are applications to rip blue Ray discs but none of these I have found allow you to dictate two pass compression VBR or designate any bit rate or file size. Others presume that you want a lower resolution for DVD or mobile device.Tmpgenc 4.0 is supposed to but it indicates it cannot handle the video part of the blue Ray M2TS when I tried this.

Yes a solution which would allow you to selectively add chapters, subtitles etc. would be very nice. There are many of these of course available for DVD ripping. But I do not see one for blue Ray will do the above. That is why I would be happy with a simple conversion of the principal stream

any thoughts appreciated. Thank you in advance

Many people seem to love RipBot264, it could be the answer for you
Encoding Blu-ray’s to MP4 with RipBot | Adubvideo

Or, if you want to just rip the stream without any re-encoding, and can live with the .MKV container :
MakeMKV - Make MKV from Blu-ray and DVD
SmartLabs - SmartLabs tsMuxeR
(I'm not familiar with a BD ripper that remux's straight to .mp4, sorry).

Try using x264 and Nero's AAC encoder, with MediaCoder. MediaCoder can be tricky to use though.

MediaCoder - more than a universal audio/video transcoder - MediaCoder official website

Also, if you want to compress really hard (and recode to much, much smaller video files), consider downscaling to 720p first (using Lanczos resizing). If you want to recode at say 2mbps or so, the final result will look better.