Am I on the right track for excellent sound?

Try the DAC on your CDP first, it will likely sound pretty good. If you are not happy you can consider an outboard DAC. I used the DAC on my old Linn Classik Music and it worked very well. Have since moved to an integrated with outboard DAC. Much better, but mostly due to the amp change.

Pure Music is great, I rip CD's into itunes with Apple Lossless. AIFF about the same in my opinion. Have not tried MAX, quite happy as is.

A good quality cable also makes a big difference between the mac and the dac.

You might try the Macbook's optical output first. Will only cost a few bucks for the adaptor (one came with the Monster cable I bought.)

For ripping, I suggest XLD over Max. There's also Rip, which I believe is meant to replace Max, but XLD seems more reliable, though the interface is clunkier. In particular, Rip sometimes seems to be unable to get AccurateRip info when XLD can and doesn't seem to be able to retrieve the pre-emphasis flag.