The main problem with using a receiver as a preamp is that it is really three components in one box sharing a common transformer and power supply: a tuner, a preamp and an amp. There's just a lot of STUFF in there and a lot of opportunity for noise and interference not to mention the fact that the power supply and transformer are doing triple duty. As you found out, a dedicated preamp is a much better solution for 2-channel music.
As for processing, unless you've selected a processing mode, it should be outputting only a 2-channel stereo signal.
As for processing, unless you've selected a processing mode, it should be outputting only a 2-channel stereo signal.