Well, a game engine is tailored for real-time rendering. Using it for cinematics and expecting the same quality like a offline renderer is problematic. All what you have mentioned is most likely true for all the other game engines around.
Or would it be easier to extend Unreal?
You will have some hard time to extend features like translucent material etc, other features will be more easily added. A game engine has still a long way to go to compete with real raytracers.
But my real question is: why do you want to use a game engine instead of an offline renderer ?