Looking to Improve Music Played from Apple TV

I haven't seen any jitter measurements for the Apple TV, but if it's anything like the Airport Express, you'll get better sounding results with your computer connected directly to your DAC. That would be my first suggestion.

Unrelated to the Apple TV, your computer will do less processing if you use native file formats like AIFF on a Mac and WAV on a PC. Less processing is a good thing.

What DAC are you using?

Copy CDs at AAIF, in iTunes, and steam using Airplay from a recent Mac, for CD quality.

That is the maximum sound quality with Apple TV.