Digital Audio Options

I'm about to unpack my venerable Rotel RCD-965BX CD player that has been hibernating in its factory packaging for some 12 years now.  It's every bit of 20+ years old, and due to very minimal use, I'm pretty sure it still works, but I worry about things like capacitors and other stuff going bad over the years which would impact audio quality.  When it finally decides to retire, I don't know that I want to replace it.  I mean, does anyone listen to CD's anymore?  I think I'd rather buy a turntable, which I haven't owned since my Mitsubishi LT-5V, and brush the dust off my vinyl for a new thrill!

I've been using Bluetooth in the car, and hooking up my iPhone to my pre-amp.  I can't imagine that's providing the best source, but that I don't know.  I'm probably one of the last guys to buy a gas grill, buy a CD player, and incredibly, I've yet to own a DVD player, so when it comes to electronics, I'm in the dark ages.  So, I have a few quick questions:

1.  I've seen a small device from Focal that plugs into an open set of RCA jacks, and allows the streaming of Bluetooth to the system.  I would assume that what is streamed to it will dictate the sound quality.  I have to imagine a good source would be as good as a CD, but is that the case?
2.   If the above is not sufficient, is there a product that provides streaming of Bluetooth with some sort of DAC or processor that improves the signal quality?

I don't know that I'm interested in getting into complex digital audio servers and the like, so any advice and/or input would be most appreciated.  I'd probably be looking to spend $500 or less.

Thanks!