Choppy and distorted audio, no monitoring

I'll try to keep myself short. I'm trying to record / broadcast gameplay from my PS4 with the Razer Ripsaw. I followed the manual and connected the PS4 to the HDMI input on the capture card (CC), and connected the monitor / TV to the HDMI output on the CC.
Now, if I plug my headphones into my PS4 controller, I can hear the game audio, but none of it is being recorded - alright. So I pull out my headphones, and make another brief recording. This time, the game audio is there, but it is EXTREMELY choppy and distorted, and of unacceptable quality.

I looked online, and what I found is that installing THX Spatial Audio (the trial version; I'm not willing to pay $20 to fix something that should be working to begin with) and using it as the audio driver has helped, and that the in-game audio was not distorted in the video recording anymore.

HOWEVER - I cannot hear / monitor the in-game audio at all! I tried plugging my headphones into my laptop, I tried plugging it into the AUX *and* the MIC input on the CC respectively, but nothing works! So now, when using Spatial Audio, I end up recording decent audio but I can't hear anything during the actual recording!

My question is - where does this choppiness and distortion in the audio come from? And how exactly do I hear the in-game audio WHILE recording, while also having it recorded in the video?
I feel like I'm slowly losing my mind, there is nothing 'Plug & Play' or 'Easy' about this, and I'm seriously desperate for a solution at this point. (Note: I'm using OBS)

Edit: The video recording itself is perfectly fine, I'm explicitly only having problems with the audio.