Leaving aside issues of "quality" for a second converting MKV files can get very tricky as they are known to use all manner of tricks (variable frame rates, embedded/multiple subtitles/audio and the like (simple to work around but you do have to do some work) to improve quality. Not to mention mkv blu ray tends to mean h264 which is not the nicest thing to convert from.
Playback is fine (MKV authors often intend only this) but conversion tools and standards like DVD that do not support such things.
To answer your question it should work OK but be wary of the pitfalls and complexities. DVD resolution is not that different blu ray.