Youtube has been HORRIBLE lately on my PC. They made changes that broke full screen display. Response is so bad that the other night it took hours to watch a 30 minute video. Don't blame your phone.
I can watch HD on my mobile connection no problem... So.... Not sure why you're having those issues.
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For some reason when I watch YT videos over mobile data it looks really blurry. I have LTE and over 25MBPS download. My WiFi is extremely slow yet it plays HD videos with good quality
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Are you ensuring to tell it to play HD? it won't do it by default unless you tell it to.
Sent from my T-Mobile Note 3 using AC Forums.