Using Sony 300 disk CD changer as transport

Getting a DAC for a 300 disk changer is a great way to up the performance of the system. The DACs in the changers are not stellar performers but the transports are reasonable. You might also consider a de-jitter unit before the DAC but do that after you have tried the basic DAC/changer setup to see how it performs.

Is your sister concerned about the sound quality of the changer, because if she's not, then why burden her with any of your audiophile aesthetics? For the vast majority of users a mega-changer system is far preferable than a single disc player.

I would suspect your sister would enjoy the convenience of a 300 disc changer, therefore if you have to use optical, go with a glass optical , and tweak away .

How much would a DIP help? There are a few Monarchy on sale but what type of improvement would one expect?

My experience: I had tried a 400 disc Sony 555ES, and even brought it back and tried a second one, only to return that one too.
They sounded like dreck compared to the Sony 9ES 5 disc changer, even the 5 disc 7ES is wayyyy better.
(I own both a 7ES and a 9ES 5 disc changers, and used to have a Sony 89ES 5 disc that played endlessly for 8 years... I mean 12 hours a day, every day!)
Even using an Adcom DAC (which sounds as good decoding the output from the SCD777ES as the CD RCA out from my Sony SCD777ES) The 400 disc changer was total bad bad sound.
Those mega changers spend the money on bells and whistles, and skimp on the basics.
A compromise would be a used Sony 9ES 5 disc changer... good sound and still have a 5 disc changer.