Years ago I used the optical out on an Airport Express to stream to a Schiit Bifrost Multibit DAC, which I thought was an improvement over the Airport's internal DAC.
I swapped out the Airport for an Allo DigiOne Signature with Shanti linear power supply, total cost less than $500. That was a very good improvement over the Airport and I still use it today.
I recently upgraded the Bifrost Multibit to a Bifrost 2/64, which is definitely better to me than the original, tighter bass, more accurate sound overall.
That means I have the Bifrost Multibit available for sale, offered at $250, please message me if interested. This is the version without the USB card, so please make sure you don't need that or plan to get one from Schiit.
The Bluesound Node seems to be a popular all-in-one solution with updated tech that likely will outperform your Airport and has the DAC included. I've read that adding an external DAC to the Bluesound is more improvement still if you ever want to go there.
If you keep the Airport and use any of the DAC's recommended above, fiber optic cable is the only way to connect to it, which of the DAC input options that include USB, digital coax, and BNC, people seem to find least desirable from a sound quality perspective.