The output should be used if you want to get a mesh. The terminal is great inside BF to see something or render in Arnold, etc. Also when you connect something to the final input by default it won't show it in the viewport it will just render, if you want to change that behavior go to the attr editor and check the box. However, I wouldn't recommend it.
That way you add proxy or lighter geo to see in the VP and just for final render the heavy/more complex geo.
If you could share a few frames of the seq would be the best. On my side is working correctly reading and outputting the seq to render either with RS or Vray. Or if you can not share a few frames of the seq try to make a repro scene that you can share.