Bryon, 1st to answer your question, if you're using the pre outs from the Denon to the CJ amp, yes it's tinting the music. You can still use the CJ to drive your Paradigm fronts, and use the Arcam for the center\surrounds if you want surround sound. I wouldn't worry about changing out the CJ right now, it's not the weak link.
Yes the Arcam is an AVR. Here's a link to their website: www.arcam.co.uk. And here's a review from HomeTheaterSound: www.hometheatersound.com/equipment/arcam_avr200.htm
Here's a link to Kimber Kable, www.kimber.com., who makes the Heros. They are interconnects to go between your Arcam and CJ. Go to Avguide.com, then accessories, then interconnects. Find Kimber Hero and you can download a shootout review they did between 13 interconnects ranging in value from $122 to $250, with the Hero being the best value at $150 ($160 now) and the best overrall regardless of price. They used to charge $3.00 to download them, but they're now free.
Lastly I'd look at changing your speaker cables. But I'd change my receiver and interconnects 1st. Then, when you have the money look at Kimber 8TCs. You can get them for around $200-250 for an 8 foot pair. There's a review of them on AVGuide as well.