Your receiver only has a standard ARC connection on it. Why not make your life a bit easier and just switch to optical audio from the TV to your Denon? This way you can get surround sound out of the TV into your receiver and not deal with the headache that can be ARC.
You do need to have HDMI-CEC enabled on all the devices, which can introduce their own world of problems.
Yes, the idea behind ARC is that you can have sources plugged in directly to your Denon, and they will pass video to the TV and audio to your speakers.
You should also be able to play smart apps right on the TV and have audio pass back to the receiver.
You should also be able to go to a different source plugged directly into the TV (PS5/X-Box Series, for example), and have audio returned to the receiver for playback.
It is supposed to be versatile, and for some it works great, but for others it just ends up never quite working right.