n80,
I have ripped pretty much everything in iTunes and it works, but it is not as great as it could be when it comes to metadata. On the other hand, I am quite obsessive about that so it may not be of any problem for you.
After years of doing everything (ripping-wise) through iTunes, I bought dB-Poweramp and am happy I did. For $80, it does whatever I need and then some. And it does not ask me if I want to update it every time I open it. dB-Poweramp is a breeze when converting files from whatever to whatever, except for DSD. I know nothing about free software, but this works great.
In your case, first rip everything as AIFF. Along the way, make sure to copy files on a separate hard drive or two. You can put metadata in iTunes or in (in my case) dB-Poweramp. Most of the time, it will find it for you but sometimes it is not that correct. I am not sure about iTunes, but dB-Poweramp can look it up online for you. Results may be iffy, but if you are not too picky...
I am not sure what the problem with iTunes embedding the cover art in the file may be, but I have never lost it during conversion.
Once you have everything on that separate hard drive, convert it FLACs, Apple Losless, whatever you like, and store it separately. Then you can play all you want. As many times as you want. dB-Poweramp does preserve all the data, including cover pictures, as far as I could see. No need to think too hard about it.
I would suggest you keep AIFF on your computer and use it for that DAC, stationary system, and loading your iPhone.
If your portability includes a car, especially anything relatively new, you may want to remember where you put that FLAC hard drive. Most of the cars I have tried do not play AIFF from the attached storage device. They will all play it from a connected iPhone, though. At the same time, it seems that FLAC became an accepted standard. I tried plain 16/44.1 FLACS and 24/192 and it always worked. Your car may vary, of course but this is the general direction things may be going these days. You can load all 150 CDs on an SD card/jump drive, stick it in the car, and never think about what song you have on your iPhone or not.
In summary, I have iTunes with AIFF that I use only for loading my SONY server (that will switch to FLAC soon). I have dB-Poweramp to convert almost (not DSD) all I have to FLAC. I have all of that in FLAC that I use for loading Walkman (digital one), and that I have put in cars.
When comparing AIFF and FLAC at home, I have never found any difference. Cars do quite well with MP3, if you want to save even more space. In fact, I have a feeling they are tuned for that.
