+1 on separate transport. I recently approached just this question and got a Cambridge CXC and an MHDT Orchid DAC. The CXC is solid (there are other solid transports, of course) and my DAC is great.
I may be repeating things you've read, but here is my bullet list for the separates route:
- CD's are yielding to streaming. I already find myself using my streamer way more than my CD player.
- Good DAC can accept multiple inputs — I run both CXC and Node 2i streamer through DAC. Thus, improving sound of either digital source (and a third if I connect my laptop) could be done with one switch of DAC.
- If you get a tube DAC you can tube roll. Cannot do that with most CD players.
- A CD transport has no money spent on an internal DAC; it does one thing well (if it does it at all)