The AE does not sound that great using the analog out. As to option 1, a dac would improve the sound quality. You could, for example, get a musical fidelity v-dac which is considerably cheaper than the Cambridge dacmagic. As to option 2, I'd simply add a SB touch and use the analog outputs. It works great and is very versatile (I know this is not on your menu of choices but I am not convinced that the Marantz 7004 is a better streamer than the SB Touch). As to 3, there are a few products out there that do what you want (an integrated solution) and no doubt more will come out. Still if you like your integrated amp (and it appears that you do), this option does not make as much sense as adding a dac to the AE Express or a SB Touch. Going either with the musical fidelity v-dac or the SB Touch will improve the SQ of your system for $300. I've thought about getting the Marantz NA 7004 but decided that the price was high for its feature set.