Besides loads of input from yesterday, more to absorb today. Thanks everyone for all the great input. The common thread among this collective input is I need to forget about DACs for now and readdress the basics. I have boxed up the amp and speakers and returning them tomorrow. I want to return to ground zero and start building around the speakers I land on, which is what I should have done the first go around, but no point in me boohooing over spilled milk.
The most repeated input above is start with speakers. So I have a lot of speakers auditioning to do, which actually sounds fun. Perhaps I need to change the title of this thread to "Should I forget about DACs for now, return new equipment, and start over on my audio basics?"
I'm starting to grasp the concept of room correction that Mr Widget suggested. My Sony home theater system has a room calibration set up using a mic held at my listening location within the room I have used. From what I can tell, room correction looks to be software only (and a mic). So if I have my redirected agenda back to a correct path - First priority - speakers. Second - an amp matched well to the speakers I landed on. Third - once I have the amp and speakers established, buy the software and mic for room correction.
I really like the "look" of Klipsch speakers, so I will include exploring their line to see if they sound as good as they look. I have a small living room, so I don't need gigantic speakers. The Elac models laserjock suggested are another attractive set, so I will include them in a listening test. I would be curious to hear from members here who have an audio system dedicated to music only in a small room such as my living room - it is approximately 12' x 20', and what speakers they landed on.