I’ve usually down-rezzed my files to 320kps so that I can fit everything in my library on my SD card. But cards are getting large enough and cheap enough that I could probably store everything as FLAC if I wanted. But like you say, locking your entire collection into a single app is a big step.
Watching the roll-out of Roon ARC reminds me of how excited and then disappointed I got when Plex launched Plexamp mobile. The big issues with Plexamp (which I think otherwise looks and works well and has an Android Auto app) both related to offline content - that Plexamp limits (I think to about a day’s worth of music) how much you can download, and that when it does download music the files aren’t readable by other apps. I’m guessing that Roon is storing them at Internal/Android/Data/com.roon.onthego/files - but the files aren’t even visible to any browser I have tried so far.
There might be very good reasons for this - allowing for syncing of play history etc - but then the app would need to be the one offline content audio player to rule them all - it needs Auto, and to save to an SD card, and maybe Cast, basically every feature that anyone could ever want. Which might not ever be achievable. Certainly Plexamp came up against these limits, though the app always felt a bit of an afterthought at Plex. Maybe Roon has the time and money to get it right. Or maybe mobile data gets cheap and ubiquitous enough that we stop obsessing about offline access to everything.
So Roon ARC will replace Plexamp for me as the best way to stream music to phone/bluetooth speaker away from home over Wifi. But for car/out and about I will probably stick with Poweramp. For now