Can Poor Wireless Performance at High Traffic Volume be resolved by high-end router?

I’m using two 2.4G wireless routers, Router 1 acts as a main router, whereas Router 2 is being used as a wireless repeater.

Whenever I’m streaming on two devices simultaneously, I notice performance degradation for the rest of the connected devices, often to the extent of losing connection and reconnecting.

1. Would this be solved by purchasing a high-end router having higher specs OR it would be of no effect considering that 802.11n only supports transmission to one user at a time?
2. Will it solve anything if Router 2 is connected through ethernet cable, in which case it acts as an independent access point to be able to share load of the main router? I believe using Router 2 in Repeater mode only overloads source Router 1. Is this true?

To clarify:

1. If the second router is connected to the first router via WiFi, then the second router is acting as a repeater, and not an extender. This will typically halve your available wireless bandwidth unless a separate wired or wireless back-haul channel (dedicated to the connection between the two routers) is available.

The performance degradation with a repeater configuration occurs because wireless devices can (typically) transmit at once, requiring that wireless transmissions to be doubled in that configuration (router to repeater and then repeater to client versus just router to client). Furthermore, wireless interference (due to overlapping channels) is made even worse, raising the contention for available frequencies.

2. If the second router is connected to the first via Ethernet, then the former would act as a wireless extender, assuming that the second router broadcasts a new SSID and that the new wireless network is configured to run on a separate frequency to prevent interference.

The configuration you want where performance is a consideration is 2.

Sure, you could get a much more advanced router with superior range and capabilities, such as support for WiFi 6, made specifically to handle many clients, though that would also call for new wireless adapters that are WiFi 6 (AX) capable to take advantage of your investment. As with all things, your mileage here will vary based on your network setup, the utilization of mesh networks (where available), interference, the availability of DFS channel capability support (also dictated by the regulatory domain you're in), your clients, among other factors.

For the typical upgrade scenario, assuming you're upgrading from WiFi 5 (ac) to WiFi 6 (ax), most of the gains will be with 2.4 GHz networks. One of the most important features of WiFi 6 is the introduction of BSS Color, allowing more wireless clients to transmit simultaneously with significantly reduced collision, mitigating performance loss and better power utilization through the new Target Wake Up Time capability in WiFi 6 clients.

In the case of a user hogging bandwidth (via streaming content from the internet, or heavy downloads such as torrents, etc), you'll need to implement QoS (Quality Of Service) controls specifically on the router connected to your modem. Here is a good primer on the subject.

Note that enabling QoS on (specific) Broadcom-based routers may disable performance-enhancing features such as Cut-Through Forwarding, which is designed to increase the router’s performance through bypassing protocols that add extra overhead to router processing (such as packet level inspections, sorting, filtering, and queuing). Typically, you'll want to disable QoS for links faster than 100 Mbps, especially if you're using an older Wireless router such as the Netgear R7000/P series. Consider this factor on workloads that require low latency operations, such as gaming and live streaming.

Secondly, ensure that proper DSCP marking is enabled on your client's OS to utilize QoS shaping properly. Some software, notably Killer Networking Control Center, mess up this setting due to the so-called "advanced stream detect" feature in their bloatware. If you have such a client running Killer Networking's bloatware, uninstall the software and reset the network settings to fix that mess.

For more on DSCP settings in Group Policy Management on Windows, see this article. Only touch this if you're affected, as is the case with people using Killer Networking bloatware behind enterprise grade hardware.

Other changes you might want to look into:

In your client's wireless network adapter settings, see if packet coalescing, can be toggled on. This will significantly improve reliability for clients that keep disconnecting on busy networks. Dell has an excellent write-up on the same topic. Microsoft has more technical documentation on the same, and its' caveats, as in the limitations associated with coalescing support in the case of RNDIS over virtual network adapters.

Secondly, monitor your router's temperatures. Overheating, most likely due to poor ventilation will make the SoC therein to thermal throttle, reducing your performance. Proper ventilation is critical to both the longevity and overall performance of wireless routers. Under heavy load, throttled performance is the last thing you want to encounter.