Definitely,, upgrade the DAC!! Then, mod the Node with a LPS ( I used a TeddyPardo, but there are other brands out there too. ) I'm using a Node 2i, feeding a PS Audio Directstream DAC Mk1. I have a great soundstage, both wide and deep. Great imaging. The lps made a significant difference. The internal dac in the Node is just not the quality you need for your system; it was built to a price point!
You didn't state your budget, but right now TMR is selling factory inspected PS Audio Directstream DAC Mk1 for $1799, which is a smoking deal!! These are units that people have traded in for the new Mk2 unit. The Mk1 was $6000 when new, and the Mk2 is $8000.