would I be better off...

Labguy,
I'm not hugely knowledable in this arena but you asked if MP3 320kps is cd quality and its not. Cd quality is 1411 kbps.

On a side note, spotify premium is 320 kbps, the free version of spotify is 160 kbps, and Tidal music streamer is 1411 kbps.

For me, there is quite a difference between 320 kbps and 1411 kbps. Much of the micro details, vocal nuances, and background / underlying vocals and harmonics are very subdued if not lost completely on 320 kbps. Once you've heard this, it's hard to go back, at least when critically listening.

There is a Micro Mega MyDAC for sale here, asking price is $250. I think it would be worth trying out. I have not heard one, however I mention this option because this DAC has gotten great reviews by audio press and owners as being very in the under $500 price class. If it did not work out as you liked it could be sold without much loss.

Thanks guys! I just bought the parasound zdac.

Great! Should be a good addition to your Yamaha.