They are transmitting digital data not analog signals- False
If you tap into your ethernet cable do you see 0's and 1's? You do not. You see a square wave ranging from 5-80 MHz. A square wave is.....wait for it.... ANALOG. It is a wave. It is shaped different than a sine wave but it is a wave. It is analog. Now since the square wave is interpreted at the receiving end as 1's and 0's it is not as susceptible to analog noise- ie. static and hiss, but the square wave's weakness is distortion causing timing and phase shifts. And EMI or RFI can get in the line and ride all the way into your DAC, and that will affect the performance of a D/A convertor.
No one will be able to tell the difference- False. Better cables do a better job at interference noise rejection. That is quite noticeable to the performance of D/A convertors, especially since lower cost DACs and music servers have little to no noise rejection on their inputs. The higher end, more expensive DACs and Music servers have better noise rejection, isolation of the incoming signal and more often now, re-clocking. At least they should.