Nothing will improve the sound more than a pair of decent speakers.
Agonizing about coax vs. optical or whether a Sony is better than Onkyo is a distant runner up.
Oh yeah, after you get some decent speakers, lose the receiver and buy either preamp/amp combo or an intergrated amp.
After that you can worry about what your DAC should be.
Really, if you’re happy with the sound of your system now - why ask why?
Chasing the dragon is expensive and probably unnecessary for you.
Can I suggest to borrow a coaxial digital cable and test? It’s free and only takes a bit of your time. Most shops will do this, if you can not hear any difference - return it
I’ll pretend the opening poster is a friend or relative asking me these questions. I’m not an expert at all but playing armchair expert can be fun hehe. Just sharing own experiences here.
I’d make sure all CD’s were ripped to hard drive, add an Allo DigiOne to the receiver as a Roon endpoint and enjoy Roon for all playback of your CD collection.
Have a Roon supported Intel NUC i7 (decently future proof) running ROCK built, and have that plugged into the router, in another room.
This is what I did with my old man’s (dad) setup. I converted a very old laptop into a headless a Vortexbox CD ripper (free software). Boot it up, put a CD in and it automatically rips, then the CD pops out when it’s done automatically, read for the next disc… this allowed him to rip his 400 CD’s in a couple of months, without the pain of having to deal with Windows/Mac. And no keyboard/mouse/screen interaction at all.
That was the first step into getting him into the Roon world.
Now he has my old sonicTransporter i7 (i7-7700) running Roon Server in the home office/study on the other side of the house. And a networked Allow DiGiOne feeds his Denon 4520 in the family/TV room. It sounds as good to his ears, as the various very good Marantz and Sony CD players he’s had before.
If I was absolutely forced to answer your questions, based on no experience with your gear (playing armchair expert) I’d say stick with optical from your CD player, because it’s immune to ground / leakage current loops and associated RF and I’d be hoping your Onkyo can do a great job with handling incoming jitter. But you can/should verify with your own listening tests/preferences of course.
But my main recommendation would be ditch the CD player and go all in with Roon 
I’m assuming you really want to keep your speakers and Onkyo receiver of course. A change of speakers can make a huge change in the sound of course. And then there’s always the room, but I’ve assumed you have that sorted too.
Yeah, the darn birds are always twittering 
.
Yeah, I was thinking the same thing. Can’t remember the last time I used the tuner. I have Roon connected via another optical digital cable (from a Mac Mini running Ubuntu), and it sounds great.
I never them birds cause the volume is way to high. I once ran my speakers that were rates for 600 W each continuous at 1200w each until they actually caught on fire - but man the bass was awesome for a little while - the walls were actually moving over an inch. Still using those speakers after a $3000 rebuild - but went to tube amps that have a softer clip. Such is my history of becoming an audiophile nut.
Not only that, I’m the guy that thinks Roon out of a Google Play Mini sounds OK. Imagine, a WiFi receiver, Chromecast, DAC, amplifier and 4-inch speaker, all in one little box!
But the CD->receiver question is more of an exemplar. There are so many interdependent parts here, it’s tough to know where to begin. For example, what’s the cheapest CD player / receiver combo you can think of where the cable would make a difference?
Yep, I get that. In process.
Ditto.
Sometimes friends bring over CDs. We’re all very old. 
Yeah, this pair was good for twenty years ago, but perhaps it’s time to upgrade. Of course, I do have a pair of Lafayette Criterion 2002+ speakers I could dig out of storage. Haven’t been powered up for quite some time.
Best advice on this thread.
Awesome stuff. It sounds like you’re all over it.
@Bill_Janssen just beware and be strong, if you get on the audiophile road and you are an inquisitive person, and you like good sound quality (I should say wonderful sound quality as I’m pretty sure you can get good sound quality today) your wallet will suffer. It all depends how much this is important for you and how much would you want to spend to listen to music.
In my opinion forget about cables for now. you can go speakers then integrated amp then sub then dac.
These days there are wonderful builds with little money
Well, given that the Sony is mainly a DVD player first and reviews were not too complimentary about it’s audio playback abilities; I’d say, use the Onkyo’s DAC. From the Sony to the Onkyo, given that you are using it to play CD’s, stick with Toslink; but if you want to experiment, then get a good quality (but not overly expensive) COAX SPFDF cable from Blue Jean cables (about 18 USD for a 2 meter cable).
I would suggest if you wanted to keep the Onkyo, you can add a device to send Roon directly to your Onkyo via ethernet like the Allo DigiOne which takes an ethernet in and outputs to a COAX SPDIF, which would then feed into the Onkyo.
Also, if you are not doing so already, if you are just using the Onkyo for music, then I would suggest making sure the PURE AUDIO mode is engaged as described on pg 21 of the manual.
Given the likelihood that your current system will not reveal the difference between cables, you’re much better off focusing that nervous energy and money on a speaker upgrade. However, this is a great time for you to decide whether you want to start down the audiophool path. That “bigger” decision can also be made even if you do decide to upgrade your speakers. For example, there are many brands/models of speakers that will improve greatly the sound of your current gear and any comparable gear you get to replace it (by “comparable,” I mean that you decide not to spend your days worrying about whether your system sounds its best).
I advise you to consider carefully whether you want to get to a place where your system resolves cable differences, because the journey is expensive, makes it more difficult to relax and enjoy your music along the way, and is filled with tons of dumb mistakes to make.
Expense. It is difficult to give you a definite amount of money that you can spend to get to being able to discern cable differences. This is because system synergy is a very real factor in the performance of the gear. I’m sure there are $10k amps that could be paired with $15k speakers and $5k sources that will not work well together enough to resolve the difference between something normally obvious like silver vs. copper speaker cables. Then again, there is probably a $1k system out there that will show that difference readily.
So… One of the mistakes you can make is to upgrade one component with the expectation that you will eventually upgrade others to match the quality of that first upgrade. It’s definitely doable, but it is also one of those places where you can make mistakes. Maybe you like the sound of a particular technology or brand or design when you hear it at a dealer showroom. If that choice is hard to match with other components (low efficiency, Lowther drivers, wild impedance curves, for speaker examples), then you will have a hard time, later on, matching your next upgrade, just because of availability, and that will be further frustrated by tastes that you might develop along the way to that second upgrade point. Also, you might bring home a component that doesn’t work well at all with the rest of your gear, and you’ll have to wait for the next upgrade while listening to something you might not like.
Anxiety. Once you start listening to your gear, as opposed to your music, there is a good chance that the sound of your gear will prevent you from enjoying your music. That’s a terrible betrayal of your music and your happiness. The best way to avoid that is to research your upgrade carefully and listen to the upgrade on your system before buying (nearly impossible these days).
Mistakes. Buying gear with features that you can’t use now but expect to use with later upgrade - it won’t happen, dude - don’t do it. Buying gear that WAY outclasses the rest of your system - you won’t get your money’s worth until you make the next two upgrades, and you might not like what you hear. Spending money and time on tweaks - they’re not worth the cost or effort until your whole system is done with the upgrades (and then maybe not). Buying expensive cables - waste of money until you system can resolve the differences, and then the differences will not be huge - stick with entry-level cables until you can hear the differences in cables loaned to you by your dealer (and you are willing to pay those prices for those small differences). Bad speaker placement - a $500 system, with speakers placed for acoustic compatibility with the room, will outclass a $10k system with bad speaker placement - if you’re (and your family) not willing to allow you to (kinda) take over the room, it makes no sense to spend more on your stereo than you did on your wife’s engagement ring (speaker and listener placement are critical to the performance of all the gear). Falling in love - you will go to a dealer or a show, and you will hear something that kicks your ass, and you will buy it, and it will not work with your system, and you will have to start over. Tubes - they can sound magical, but they are expensive and a pain in the ass - my next upgrade will lose the tubes, because I’m just sick of fiddling with them, replacing them, hearing the degradation of their sound over time, etc. - don’t jump on the tube wagon until you’re 100% sure, because they will limit dramatically what speakers you can use.
If you’re going to enjoy the ride described above, then go for it. A lot of folks do. There’s nothing wrong with enjoying the gear more than the music. It’s your life, and to say that geeking out over audio gear at the expense of musical enjoyment is immoral or unhealthy is distinctly unfriendly. Maybe it makes sense in North Korea to expect to be told what to like and dislike, but the free peoples of the Roon forums (fora?) should not be subjected to such mental leg-humping.
If you don’t think you’ll enjoy that ride, but you still want to hear the destination, consider selecting a budget, or saving up to a certain budget, and buy the system all at once. If you diminish your choices somewhat (or a lot, really) you can get great results by working with a dealer. They’ll be able to assemble the system in their showroom, so you can hear what it will sound like approximately (remember room acoustics!). They might even let you take the gear home for a trial period and help you replace components to work better with your room. The aforementioned Rocky Mountain Audio Fest (coming up soon in October) always has budget systems on display, and they are carefully assembled for system synergy. As I recall, last year’s show had a system for as low as $500? Maybe $1000. They go all the way up to $5k, I think.
If you’re set on doing one upgrade, then I would agree that the best way forward right now for you is a speaker upgrade. If I was in your position, given my tastes in music, my understanding wife, my limited knowledge of what speakers are out there and what they sound like, and a limited budget, I would buy a pair of Klipsch horn speakers (the models with midrange horns), maybe the Cornwalls. They are known to sound good with the kind of amplification you have, they do well with more “specialist” gear, and they can survive a few rounds of upgrades to your other gear before you’ll jones for nicer speakers. Then again, I’m very biased, and Klipsh is what got me started on this despairing path.
Good luck!
A lot of excellent advice here.
And yet, if it was my choice, I would buy digital active speakers, speakers with DACs and amplifiers built in.
They are cost effective, the sound great because the parts are designed to work well together, some things (crossovers, DSP) are better done digitally, they reduce the number of boxes in the room — and best, they eliminate the whole issue of cables!
They exist in many price ranges, from $1000s to $100,000.
Not only would I do that, I have done that for two rooms.
This means that I can’t even think about upgrading the DAC or amps in my main music room, because they are all built in. So I can think about the music instead.
@Antonio_Bendezu long speech but very real, funny you mentioned the Klipsch, I own a pair of P37F and love them
You emphasize the music enjoyment and that is something we forget about when going the audiofool path (personal experience)
The only little thing I may add for our friend here is he is focusing in “digital” music. I have a friend that got vinyl turntables, then reel to reel tapes to record the vinyl, the vinyl itself are recorded from digital masters so you lose some things in between. What you hear is very conditioned to what comes in, same with food, you cook with good ingredients and the result is good, (except for pizza which is always good) anyways my point is there are digital masters that possibly sound best than vinyl recorded from bad masters. Or so I think. So going full digital is not a bad thing (Like I used to think before) as availability of good SQ music is there.
On order, thanks. I think connecting all three ways is a great excuse to stage some listening parties, do some not too inebriated A/B/C tests, see if anyone can hear a difference, prolly get more advice.
But the general tenor of advice I’m hearing is that for consumer-grade mass-produced components, interconnect cables don’t make much difference, as there’s likely to be enough imprecision, crosstalk, etc. in the components themselves to swamp any interconnect issues.
One of the optical inputs on the Onkyo is already connected via fibre to an output on the Roon Core device.
Which, if I understand this correctly, defeats the tone control on the front face of the Onkyo. Thanks.
Antonio, thanks for the long and detailed response. You put a lot of thought into that! Right now, I’m trying to build a “map” of that place, so that I can see what the different routes to it are. But, yes, I intend to eventually spend some money, once I have a better idea of the terrain.
Now that’s just a great rule of thumb!
Yes, I was thinking the same thing.
Very specific! Thanks.
I hope you feel better soon. 
Let me recommend Asleep at the Wheel’s RIDE WITH BOB as an album that always cheers me up. Again, many thanks.
Yes, I was wondering about that. So, price aside, which pair of speakers offers the best value for the money?
The same reason I bought my Naim Atom all in one and sounds awesome, less box count, maximum pleasure.
Looks like a very nice unit, and not mind-blowingly expensive, either. Is it Roon-ready? Still need speakers, though.
Best value for money is a very difficult question. It can exist at many levels. I consider my $100,000 Meridian DSP speakers good value for the money. Today I would look at Kii for $15,000 as great value. And the Kef LS50W for $2,200. All of them active digital.
When looking at these prices, remember these are not speakers but complete audio systems.
A lot of people on this forum like KEF LS50W speakeres. A complete package - speaker, amp, DAC, and Roon endpoint. Nothing more to buy, but the stands.
There seem to be some quality control issues, but if you buy from a dealer that should be, if worse comes to worse, only a minor hassle.