Digital sources make a difference which is clearly measurable on the analog output of your DAC. Even though they all are bit perfect, differences in signal quality and timing can make a difference for your DAC. That is the reason DDCs exist.

However, modern DACs often have good buffering, so not all DACs react the same way to all digital sources. It also depends if you go with a USB or spdif connection. Some DACs are extremely picky for a good source, others don’t care.

So yes, there is a difference, it is measurable. But I would still recommend choosing your streamer on budget and Interface.

If you want more information, the YouTube Video of Golden Sound on the topics of DDCs goes into great Detail.

I think your breakdown is pretty reasonable, I wouldn’t change anything drastically.

At the moment you are thinking about separates, have you considered dumping the whole 5k in a pair of active streaming loudspeakers? Although I personally like my separates, usually the value proposition goes up when combining boxes.

Nowadays Sound Chips in motherboards are most likely good. In my experience cheap soundcards are worse. I think a logical step would be something external, like a Schiit Fulla, even though it is over budget. But for your budget I think the limiting factor is not the sound chip of the Mainboard.

But my guess is, that there is some weird kind of audio “enhancement” going in. My dell work laptop has a feature on by default, which should enhance call quality, but actually makes everything sound as you were sitting in a bathtub. Please check both the settings in your audio driver and in your windows control panel. There might be a checkbox checked that you don’t want. I suggest disabling everything which suggest enhancing something or especially room simulation.