No, you can plug everything into the 3700 and output them to your two displays.
What I mentioned is simply another option, that's all. ...The Panasonic and the Sony 4K players both sport two HDMI outputs for more connectivity in various setups.
Use the HDMI Video out (Video/audio) of the Panasonic to your Denon receiver.
You'll get both video and audio. Just forget the other HDMI audio out (you don't need it).
You're all set man.
The Denon 3700 will pass the video signal untouched to both your displays.
And when playing a DVD your displays will upconvert to their native resolution...1080p.
Blu-ray 1080p perfect.
4K Blu-ray HDR > SDR done by the Panasonic 820 player.
You are flying above the sky, everything in your world is okidookie.