A series of 100 nm thick InGaN films with In content up to 14% has been grown by MOVPE on SiC substrates. Optical characterization was carried out by means of reflectance spectrometry, photoluminescence and cathodoluminescence. Optical properties of the samples have been correlated with the microstructural properties measured by atomic force microscopy, transmission electron microscopy and X-ray diffraction data. Results indicate a dependence of the optical properties on the In content in the sample, as well as on the residual stress in the films induced by Indium incorporation. Part of the strain is reduced elastically by formation of pinholes which reach the InGaN/GaN interface, where first misfit dislocations are observed to form. Our results show that luminescence is directly correlated with the strain distribution in the layers. Pinholes are observed to act as nonradiative recombination sites for carriers, while strain relaxation around pinholes may enhance luminescence emission. We discuss the influence of strain with respect to In incorporation, the appearance of piezoelectric fields and effects due to strain induced band bending.