A few comments…
I agree with the OP’s sentiment… recently have had a number of conversations with an industry friend of long standing… seems digital is now MORE complicated than isolating your turntable, cleaning your LPs, and getting the VTA right. HOWEVER I can definitely report that all the pain is worth it; the recent configuration of my system (many digital boxes + a Tambaqui, + a bunch of other very expensive borrowed optimizations) was at times beyond words, and certainly exceeded what I thought possible from my BHK + Focal Pro ‘back-end’. So: hang in there.
What I tell everyone who is having digital woes is: 1) get a dedicated streamer 2) get a dedicated server and 3) if you still have problems look at USB cables. HOWEVER getting high res, DSD256, etc., is not the priority. Getting your redbook playback sounding better is, and good streamers and server definitely do this. Consider high res formats a total bonus – additions to your digital front-end should justify their cost on redbook playback only. I don’t agree with Darko on everything, but I share his focus on redbook, and support his assertion that high-res is a distraction for most listeners (and I’m someone who listens to a LOT of high res Qobuz).
I have had fine experience with Allo boxes at the low end, and great experiences with Antipodes and Innuos products, both of which are a) dedicated solutions and b) have user-friendly interfaces.
USB: I agree it is a crappy format we are stuck with. Unfortunately very few dedicated streamers, including most from the brand mentioned above, support any other format natively. If you have a DAC with other inputs (particularly HDMI), investigate those. There are devices Antipodes as well as Matrix and others which convert USB to HDMI.
In your case with the SGCD, you want the best USB input you can get. USB input quality is 100% synonymous with sound quality, for redbook. Try an Innuos Mini or an Antipodes EX with an AQ Coffee USB cable and I’ll bet your problems disappear. And compared to an iPhone, I’ll bet the sound quality will be beyond your expectations (with redbook).