1)Without a "digital in" your Sony can't be used as a dac. Could you modify it? Likely. But putting your money toward a separate dac would offer much more flexibility. I use a Sony 707 with a Bel Canto dac2 and have the option of choosing to change/improve the sound by changing dacs.
2)For ripping cds use the cd drive in your computer with a program such as EAC that compares the copy with your disc to make sure it's put a good copy on your hard drive. This allows using a less expensive drive since you're not listening in "real time".
2)For ripping cds use the cd drive in your computer with a program such as EAC that compares the copy with your disc to make sure it's put a good copy on your hard drive. This allows using a less expensive drive since you're not listening in "real time".