Help me set up new stereo system

You may want to check for ways not to use USB, which in general is of lesser quality than other digital transfer mediums. Some Mac Minis have offered Optical outputs in the past but I'm not sure about the current offerings.
I hate to sound like an arrogant snob--actually I am an arrogant snob, but Ihate sounding like one--but since you have done low bit rate transfers, it probably doesn't matter what decisions you make because there won't be much of a difference. In a way, that is comforting.
I would just use the USB output of your present Computer and learn how to manage files in higher bit rates. When you have more confidence and experience and a larger library of higher res files, then start investigating replay options and technology.

I agree that my library is low quality. But I want to change that and it does not need to be an overnight thing. I don't mind building up my library into high quality/high resolution files. If I need to use my Oppo BDP83 player for a while and buy a few CD's that's OK.

It's really looking ahead, what is the best way to have high quality recordings on a PC/Mac Mini and have the thousands of songs and playlists right at my fingertips via an iPad, etc.

Don't get too caught up into chasing higher resolution files, making you ignore any of the great music you've already accumulated.

I love sitting in front of my Simaudio amp and DAC with Nola Boxer speakers playing CD resolution or higher files but the musical experience is just as satisfying when I'm walking around my neighborhood at 7 a.m. listening to 192k mp3 files from an iPod shuffle with decent earbuds while talking to all the neighborhood cats who are always sitting in their front yards at that time of the day.

It's the music, it's the music. Enjoy what you have.

And if I buy a few high resolution albums from DSD what format will they download in? Will iTunes be OK or should I use something like Jriver or Amarra?

Thanks again for all the help.

I highly suggest not relying on iTunes as the playback engine, especially if you will eventually be downloading DSD. Audirvana Plus will interface to the iTunes library nicely. If you want to divorce yourself from iTunes then go with JRiver which is what I did. I stored my music on an Oyen Mini drive and used FireWire to connect it to the Mini. Then I pointed JRiver to that drive and imported my music. These days I am using a network and wired Ethernet solution that relives me of JRiver and the Mini, but that's another story.