The Counter Factor is a hack that alters the interrupt timing of the N64. It's a pretty severe speedhack in that regard, and as far as I know has not been implemented in mupen64plus.
If you want other ways to reduce lag, check out the mupen64plus.cfg file, especially the Video-General section as well as the section dedicated to your graphics plugin. (Probably Rice)
In there, you should be able to alter settings like resolution, and certain shaders. Fog, for example, can be disabled with little penalty, as well as more hackish things like how often the framebuffer is refreshed.