The Linton is rated 6 ohm nominal so to be on the safe side we can assume it is 4 ohm nominal. According to measurements by Stereophile, sensitivity was about 88 db/2.83V/1m. If Stereophile is right, Wharfedale's claimed 90 dB/2V/1m is ridiculously exaggerated (to the nth degree). Better safe than sorry, I would suggest we assume Stereophile is right, that it's sensitivity is more like 88 dB/2.83V/1m.
With this assumption, we can then take a look of your Q1 and Q2.
Q1: You can connect your external DAC to any of the analog inputs, it does not have to be CD. If you want to be sure the signal would bypass the AVR's ADC and DAC, you should use direct mode or pure direct mode. However, base on Amir's tests, you can use stereo mode as well, and it would still bypass the ADC/DSP/DAC as long as you don't use any signal processing including Audyssey, or even bass management. Again, to be sure, I would suggest you use direct/pure direct mode. Some people would prefer to have Audyssey on so in that case the signal will be routed to the ADC/DSP/DAC path for sure.
The 11.1 "hack" is only going to make a difference if you know the pre out voltage will exceed 1.4 to 1.5 V, otherwise from sound quality standpoint there would be no difference, not even a theoretical difference.
In order to find out if you need the pre out higher than 1.4 to 1.5 V, you will have to do some calculations. You can do a quick and dirty estimate with an online calculator. The input to such calculators are typically your desired maximum SPL, MLP distance and the speaker's sensitivity. For sensitivity, as mentioned above, it was measured to be 88.1 dB/2.83V/1m. That means if the online calculator you pick is based on 8 ohm nominal, you should enter 85, or may be 86 dB for the Linton.
The calculator will give you an idea of how much power "Watts" you would need, and then you can use that information to calculate the pre out voltage.
To do an even quicker and dirtier estimate, I would just consider the following:
Vidar specs:
Power output: 100 W 8 ohm, 200 W 4 ohm
Gain: 27 dB
So you only need 1.26 V pre out voltage to drive the amp to its rated output. If you look at the SINAD vs Pre out voltage curve, SINAD did not drop below 100 dB at 1.4 V without the internal power amp disconnected.
Based on that, I highly doubt the 11.1 amp assign pre out to front would make any difference.
Q2: This no longer applies if you are not going to be using 11.1 to assign the front to pre out.
By the way, 5 or 7 channel stereo don't always "tax" the AVR much more (if at all..) than 2 channel stereo because as soon as you go from 2 ch stereo to 7 ch stereo, you may have to turn to volume down a few notch due to having 5 more speakers playing. If you don't turn it down then yes you would tax the AVR more.
Why a cheap integrated amp, why not just a cheap power amp? Cheap integrated amps won't typically give you any more power than you AVR anyway, but a cheap power amp may. If you do want to go the cheap integrated route, you may want to consider something like the SMSL's class D: