I feel like so far both people that have replied did not read the post.
I don't see what we failed to understand.
The picture should be fine. If the Nividia and TV are HDCP 2.2 and 4K you should get a picture.
The ARC HDMI return is the same as Toslink and RCA coax digital. The only difference is that you need only one cable and not two. So depending on your TV you will get two channel audio only or a choice of two channel plus surround in the lossy codecs.
Since the audio return is standard SPDIF it will not support DTS Master HD or Dolby True HD.
However Netflix stream in Dolby Digital Plus, which is a lossy codec. Your receiver needs to be new enough that it can decode Dolby Digital plus.
If we have misunderstood your post please enlighten us. Your original post contains sparse information about the capabilities of your audio side. If your receiver is new enough to have ARC then it likely has the Dolby digital plus codec.
Your comments about will I need Toslink show you do not understand the problems and limitations of the digital audio out options of TVs.