Data will never go from the cable modem to the router at 1Gbps. This would require the modem to buffer the 53Mbps stream for 19 seconds out of every 20 so that it can then throw it at the router at 1Gbps for 1 second which of course doesn't happen. It passes it to the router in a stream as it receives and demodulates it, which in the case of VM is no faster than 53Mbps. Network devices don't hold onto traffic so that they can burst transmit at far higher rates 20 seconds down the line.
If the wireless link is incapable of keeping up with the 53Mbps coming from WAN to LAN TCP congestion control will ensure that the flow never gets to 53Mbps or will alternately reduce to a manageable level as required if wireless conditions change - this can be observed by watching a TCP flow slow starting and watching it go to a zero length window if wireless conditions cause a stall in receipt to try ensure that the receive window doesn't overload or stay overloaded for too long and too many packets drop.
If using a protocol which has no congestion control of its' own you're SooL as the router will have no concept of this it'll have a small buffer in it and if that fills it just starts dropping traffic until the buffer is under control.
I have no idea why dropping the 802.11N bandwidth
down would lower the contention, it would just give less bandwidth to be shared between the devices it wouldn't lower their contending for the bandwidth it would just mean less is usable and reduce WAN and LAN throughput accordingly though this is a non-issue as these devices are all 'visible' and would be scheduled accordingly.
The issues relating to contention on wireless networks relate to contention between different wireless networks at the RF level, not devices on the same network these are managed by their AP. This management is why one can have one device on a low wireless speed and another on a higher one, the AP changes the modulation of its' transmission / expected receive bursts depending on which device it is addressing at the time. By reducing the speed of the network artificially you are just hamstringing the devices that previously were on higher speeds.
The extended band for 802.11N is 5GHz btw, not 5MHz. Broadcasting at 5MHz tends to result in a visit from Ofcom
Summary - never drop speeds on wireless kit intentionally unless there are compatibility issues between your wireless router and wireless dongle / card which are causing problems at 300Mbit, in that instance drop to mixed mode so that the problem devices can acquire at 54Mbps / 802.11G or get wireless dongles / cards which are properly compatible with the 802.11N standard.