An explaination why spell channeling (VATS) yields higher DPS
This game looks like a FPS, and initially feels like an FPS, but it's possible that if you played your cards incorrectly, the things that you encounter become bullet sponges.
There are only two legendary effects that benefits freehand aiming and only freehand aiming. There are four legendary effects that only benefits VATS. There is no perk card that directly benefits freehand aiming damage, without benefitting VATS damage, but there are multiple VATS perks that will make it stronger without influencing freehand aiming.
Critical hits ignore the vast majority of opponents defensive effects, as well as multiplying the damage dealt. They also guarantee your bullets to be sent on a proper path to your targets current position (this doesn't imply guaranteed hit, more on that later).
The way the engine of this game, its data, and its effects are structured, this is an RPG where the majority of damage dealing and damage reduction effects happen under "magic" category and are labeled as spells. The only weapons that can compete in free-aim DPS against VATS counterparts are heavy and melee weapons. Pistols, shotguns and rifles are - with few special case exceptions - vastly stronger in VATS. Automatic rifles and pistol are - with few special use case exceptions - vastly better than their semi-auto or bolt-action counterparts. Why? The most important parameter to maximise your DPS is to maximise your critical hit frequency, your critical hit frequency is directly tied to your action point consumption, and lots of automatic weapons can have their action point cost reduced to 0% of base value, where the single-fire weapon cost can only be lowered to 50%. Higher rate of fire and zero VATS AP cost translates to critical hit frequency vastly quicker than any semi weapon might aspire to achieve.
VATS doesn't home your bullets. It periodically rolls a new RNG value that's being used to determine if the bullet that you send is being placed on path that leads towards your opponent. If the opponent moves out of the way, the bullet that has been rolled as "hit" misses. If the roll determines that the bullet "misses", but the target moves out of the way, in line of the "missed" bullet, it will hit. If you send bullets continuously, it might happen that multiple shoots will be calculated on single RNG value. There are side effects of that, beneficial includes sending out multiple critical hits for single critical spent (because multiple bullets have their 'RNG' value not substituted from the 'critical' one), or that you send 20 bullets at 95% chance and none of them hit. If you suspect you've been riding the bad RNG wave, stop shooting and let it re-roll.
What does "auto aiming" mean in terms of general gameplay, and especially in terms of PvP? It defines the combat mechanics as RPG with elements of FPS, not FPS with elements of RPG. It means that how well your team is placed, how well you communicate of incoming dangers, how good you are aware of enemy positions, how well you read their toolset, how you apply different tools on different ranges and angles, how efficiently can "VATS spell channeling" be applied on your opponents, the more efficient you get at PvP, even if you are planning to free-aim while negating opponents VATS with aid (stealthboys) - because this is a map control game, not cheerful "who shots who first".