Novice Digital (wired) Question(s)

The first thing you need is a DAC. There are many out there anywhere from $100 to thousands of dollars. I would go with a reasonably priced one from one of the better known manufacturers to start with. You can always upgrade later if you feel the need. The next thing is getting your ripped CD files to the DAC. I would recommend going wireless and use Apple Airplay because you already have a Mac and are using iTunes and your Mac is several rooms away.  If you use Airplay all you need is a 2nd Gen Apple Airport Express or 3rd Generation Apple TV to receive the signal and export it to the DAC. You can do this with an optical cable or coaxial cable. I have been using airplay for my lossless ripped files to an Apple TV or Airport Express for over 8 years in 4 different systems in different rooms and have never had a dropout or any issue. It always works flawlessly.

I haven't noticed any loss in sound quality going wireless.

I incorrectly mentioned using a coaxial cable for the output of the Apple TV and Airport Express. I was thinking of something else when I typed that. They do not have coaxial outputs.

Jitter may or may not be an issue for you depending on the DAC you use. For me it was a non issue, even with an inexpensive $200 DAC. I read so much about jitter and wondered if it was present in my wireless systems using an Airport Express or Apple TV, even though they sounded fantastic and as good or better than my CD players (an OPPO, an older Denon, and an older Sony). Just to see if I could improve the sound I tried an IFI S/PDIF iPurifier and it actually degraded the sound making it somewhat muddled. I also tried the Wyred4Sound Remedy Reclocker and I could not tell a difference.

I would caution you that there have been reports that some people had problems using the Cambridge Audio DacMagic with an Airport Express.

Glad it is working out for you. The internal DAC in the Airport Express is pretty good, probably equal to the built-in DACs in many receivers, integrated amps, and CD players. It sure makes it convenient to listen to your favorite music.