There's a lot of good advice in this thread so I'll offer just a few comments that haven't been said...
OP, aiming for a target file size is not really a great way to think about preserving video quality. In video compression, it's not so much the size of the file but the quality of the compressor. For example, I shoot a lot of AVCHD 1080p with a camcorder. A AVHHD video clip might be 1GB. However, I can convert it to prores and it might become 10GB. Is the picture quality 10X better in the latter? No, it's just the same.
You are correct in thinking about quality over minimizing file size however. And with this in mind, I would suggest using the HB "high profile" setting which is a little slower than the
TV3 preset because it is doing a few extra things to retain quality at an even smaller file size.
TV3 will play "high profile" files just fine.
I'm a bit of a max quality chaser myself, so I choose "high profile" and slide the CQ to 19 (from the default of 20). It's probably visual overkill (I'm not sure I can see the difference of 20 vs. 19) but the net file size difference is not enough to make me worry about the possible waste. End result, MKV files sizes of 25-35GB might be shrunk to 5-15GB. It's hard to see any difference from original to this version (for my eyes).
If maintaining the exact same quality as the BD is important, you have to keep the video portion of the file size "as is" and only downconverting the audio to DD. Then a 35GB MKV might be shrunk to only 32-33GB in the
TV file. This would use tools like Subler and MKV tools instead of Handbrake.
In my experience though, Handbrake, High Profile, CQ=19 is an excellent default choice for the vast majority of conversions. File sizes are shrunk to about 25% of the original (but varies widely film to film) and quality seems to be just about the same.