Hi, Perry. The optical digital audio connection is actually for audio only - no video involved at all. The same is true for coax digital audio connections.
The Yamaha manual might be really bad, but those analog connections aren't what you want. They cannot give you discrete 5.1 surround sound (such as Dolby Digital or DTS), but the digital audio connections can. Believe me, the difference in the audio will be HUGE (once it's set up correctly).
So, the blu-ray player (which is quite cool looking, btw

) has an optical output. How about the cable box? Does it have either an optical or coax digital audio output?
Coax digital audio connections can be made using a regular cable with RCA connectors on both ends (you could just use one side of the red/white analog cables that you're using now). Optical connections, of course, require an optical cable. Do you have one of those?