Because you’ve chosen to use AirPlay. 44.1kHz 16 bit is the best AirPlay can do for you. Use a higher quality connection, like for example Roon Ready (RAAT), instead if you want higher sample-rates and/or bit-depths.
44.1/16 isn’t „bad“. You didn’t hear ultrasonics, that’s true though. And if your dcs supports a different connection that doesn’t require resampling, then it’s preferable.
Which both are (streaming) bit-rates and not to be mistaken for sample-rates (kHz). Also bit-rates are usually given for (lossy) compressed content (MP3, AAC, …). So both of them (192kbps and 96kbps) may likely decompress into the same sample-rate and bit depth (likely 16/44.1).
If it really was that bad, I don’t think it was because of the resolution. Your signal path doesn’t show any headroom adjustment, so it’s possible the signal was clipping during down-conversion.