Don't make it too complicated, at least at first. Most music out there is CD quality and that should be your first goal.. but it isn't quite that simple.
Playing CDs was simple but you were a slave to the DAC in the CD player, which was often poor. Then we started getting excellent standalone DACs. And we switched from CD players to CD transports to use with our standalone DACs.
Now once you have a good DAC, streaming just requires a good streamer.
Upscaling is the one thing you listed that might be worth pursuing at first but don't worry if it doesn't fit into your budget. I have a Grimm streamer with built in upscaling but don't know what other models have this.
Keep it simple and enjoy.
Jerry