Shadow artifacts

There seems to a few problems that I will cover in order of your first screenshot.

Looking at the light map UV’s from your screenshot I see that the seams for the lightmaps are on every corner. This way each face is separate. With lightmaps the more optimized your UV space is the better your lightmaps will look. To that end what you can do is weld the seams of your cube on all sides but the bottom. This way, when viewing the scene, the player will never see this side. There is no way to truly hide all of the artifacts that you see but there are ways to minimize the effect. This is covered in the documentation above. To weld the seams you will need to export this to an external modeling software and make the welds there. If these cubes were created in an external software you can make the adjustments and reimport them.

Now, the second picture you have posted illustrates static lighting with a shadow cast on your geometry. With baked lighting you are getting a lighting calculation that is built when you build lighting. That calculation is then drawn on screen. This calculation happens once and does not update like stationary or movable lighting. As a rule the quality and accuracy of lighting from least to greatest is static/stationary/movable. Switching to stationary or movable will clear up most of the pixelation you see. Even when increasing the resolution to higher values like 1024 you will see this pixelation.

I am linking you a page that describes static lighting. Make note of the screenshot at the bottom and the quality of shadows even after increasing resolution.

https://docs.unrealengine.com/latest/INT/Engine/Rendering/LightingAndShadows/LightMobility/StaticLights/index.html

I am also linking you to our documentation on stationary and movable lights that explain their unique parameters and how they can be used to improve lighting and shadow quality.

https://docs.unrealengine.com/latest/INT/Engine/Rendering/LightingAndShadows/LightMobility/StationaryLights/index.html

Lastly, I am linking you to a lighting troubleshooting guide that will cover common practices and troubleshoots for lighting.