Frame generation together with screen scaling above 100% is what causes the graphical artifacts. Using Nvidia DSR as an alternative to screen scaling removes the graphical artifacts but G-sync may not work in that case.
For the time being I think it´s better to stay at screen scaling 100% when you use frame generation but it will result in worse TAA quality, in particular in the mid and long range, as SSAA won´t be active.
Cheers