Regarding latency, if you play a clean note (plucked, not bowed) on violin, or guitar, you should be able to get a feel for it. For high notes it should always be less than 20ms, typically less than 10ms. This adds to any other latency in your system so maybe it's just pushing the latency into the realm of what you can notice?
The wrong octaves: does it make the note an octave higher or lower than it should be?
When it produces a higher note, this is usually because the fundamental frequency of the note is suppressed too much (which can happen with bridge pickups, which is one reason we suggest using neck pickups if there are issues).
If it produces a lower octave note, this is often because more than one string is vibrating when the note starts.