video connect

In my experience, video is not necessarily degraded when passed through a processor (though some may actually degrade or even improve on the video). 

However, using ARC is never the best way to get sound out of the system.  For top audio quality, it's always best to connect your sources (i.e. Roky, bluray, etc.).

If you are using the LG TV to stream from Netflix, etc., I would highly recommend getting a Roku device to replace that and feed that directly into the Lyngdorf.

A Roku device is an external source unit that is used to stream audio/video from different sources such as Netflix, Hulu, Amazon, etc.  It sounds like you are using the built-in app inside your TV to stream from Netflix, etc.

You would buy the Roku from a distributor (such as Amazon or direct from Roku website).  The Roku has an ethernet port you use to connect to your internet mode.  It also has an HDMI output that you would connect to your Lyngdorf.  You would use the Roku as a source device just like you would use a bluray player.

I think Roku has much better streaming apps that would be available in your TV because their business is really only developing streaming hardware and software.  The Netflix app would continually be updated.  There are a ton more streaming apps available on the Roku.

In reality, there are several different streaming devices you could get:  Roku, AppleTV, Amazon Fire, Google Chromecast, Tivo.  I generally recommend the Roky Ultra because that is the only one that you can realistically upgrade with an external 12V linear power supply (such as SBooster Teradak, Teddy Pardo, Keces, Farad, etc.).  Although, you would have to request a special size DC plug.  The Roku Ultra uses a 4mm x 1.7mm DC plug (which is smaller than standard but still large enough to handle).

Correct, you would no longer be using the streaming function of the LG OLED.  The LG TV would now become only a video output display device.

Yes, both audio and video signal would be part of the HDMI cable connection from the Roku into the Lyngdorf.  The Lyngdorf would pass along the HDMI signal to the TV so that you get video.

You are correct in all your assumptions.

Using ARC is sort of a backward way to get a digital audio signal "generated" by the TV (using either a channel tuning or a streaming app in the TV).  It is not as good because you are limited to old school Dolby Digital / DTS and it uses a single wire in the HDMI cable to "talk back" to the Lyngdorf.  You will have to manualy switch the Lyngdorf into "ARC" mode when you want to do this.  However, it's always better to use a real A/V source to supply audio/video into the Lyngdorf, such as a Roku or a bluray player.

ARC was developed really for those types of people who just want to throw a TV up on the wall and expect it to do "everything", but then later wanted to add an audio system into the mix as easy as possible.  They don't want to mess with different sources (i.e. Roku, bluray, satellite receiver, etc.).  ARC is not the "audiophile" way to go.  It is really a "convenience" feature.

I need to make a correction on the Roku Ultra DC plug size.  It is actually 4.75mm x 1.7mm.

yup, 4800x is the latest Roku Ultra.