The mods that effect the HDMI/spdif out are the removing of the toslink connector, the damping of the heatsink on the main processor, the transport mods (when playing discs) and especially the linear power supply.
Yes, I think my mods have always been warm/natural.
Analog balanced out versus HDMI/I2S into another DAC? That would be hard to say, you would have to A/B them. The modified DAC and custom output stage I use give some pretty great sound.
The modded 205 plays whatever files it naturally plays. My mods do not effect what it plays. I believe the regular usb inputs can play single speed DSD. The DAC input can do up to DSD512.