how to upgrade this digital front end ?

Pick up a used PS Audio P300 ($750ish). Keep the ATT/ST and see how it sounds without the digital lens between the transport and dac.

looking for vast improvements on redbook cd is an exercise in futility. you will find subtle improvements, if you listen super long and hard.
as cfb pointed out however, the ergonomic improvement gained by going to a one-box player may be considered 'vast'.

I agree with Cornfedboy. I'm using an Accuphase DP75 and I love its musical almost analog sound! The DP 75v is the latest version which also plays SACD's and has an even better decoder section. However, if you have your doubts about the future of the SACD format (as do I) and are content with the conventional CD redbook format, then you can save a bunch of cash by buying the 75 instead of the 75v if you can find one! And with the money that you save, you can buy a great turntable rig and PLENTY of audiophile vinyl and CD's!

Acouple suggestions. First I think you are wise to get the most from your red book CD's . The new foremat wars are not settled yet and unless you plan to dump all of your 44.1 CD's, get good playback equipment.

I went from a Krell kps 25 i/l to a wadia 27 i/x and 270 transport. Two units but they are connected with ATTglass cables. Wadia upsamples fron 44.1k to 256k. BIG.....I mean BIG DIFFERENCE (and the Krell was pretty good too.)

Others to consider are the new Krell unit. ARC has a CD3 player now for $4995 (new). Linn is great and so is accuphase. Except for ARC, you need to buy them used to get them for near $10,000

In a one-box unit under 10K, certainly don't overlook the Electrocompaniet EMC 1 Mk 2. Outstanding redbook for about 5K. Add a great platform (Mana/Neuance) and a FIM Gold power cord and you're up to a total of about 8K. Beyond this, separates will be required. They can easily tip the scales around 20K on up. Goodluck.