cd carousel for hard drive cd archive

No, you really need a CD ROM drive, not an audio CD player--the optical s/pdif output is not the same as the IDE or ATA CD ROM interface. There are carousel CD ROMs, used by libraries and such, but haven't seen them used in this type of application.

Absolutely not. For optimal sound quality, use a good CD rom drive and extract the audio files using EAC (Exact Audio Copy).

This could work

http://www.sonystyle.com/is-bin/INTERSHOP.enfinity/eCS/Store/en/-/USD/SY_BrowseCatalog-Start;sid=nDivWMPdpZqvS4AoP7ilU4zM2tf3_Zg4yS0=?CategoryName=cpu_DigitalLivingSystem&Dept=computers