Ok I'll try to make some of those changes. Changing the quality of the shadows to high does not make much difference.
When I select disable the level looks much better and there's no graininess at all obviously because the shadows that are causing this aren't being rendered.
What type of shadows does that shadow quality setting refer to? because spotlights and that still render and they look perfect
EDIT: putting the shadow quality on low, makes a lower shadow quality however the graininess disappears.. on medium or High the graininess comes back, so I'll try and experiment.
EDIT2: Ive tried shadowmap resolution, this helps to a certain degree, there's a small amount of fuzziness on the edges, which isn't too bad.
The main problem can be seen in the attached picture. the grains that appear all over the walls when the texture quality is on medium or high. This doesn't happen on low or disabled.