Sadly, you have to buy the Walkman's proprietary OTG cable as an optional extra. OK-Guy can guide you as to where to obtain (probably best to order it directly from Japan). The correct model number is:
WMC-NWH10
Just to be even-handed about this, have you considered the Fiio X5 or iBasso DX90? They're easy to obtain, relatively economical, and both offer co-ax out.
I have enjoyed using the ZX1 with the Hugo, but I will admit that the ZX1 power goes down pretty rapidly when connected with the Hugo. It's totally viable, it's just that you can't charge the ZX1 at the same time as it's connected to the Hugo. Just something to consider. I don't know how well the DX90 or X5 behave themselves with the Hugo, but, assuming there are no specific issues, it's worth noting that both these DAPs have a memory card slot (DX90 = 1xMicroSD, X5 = 2xMicroSD) and the DX90 has quick-swappable Samsung SG3 phone batteries, so even if the power goes fast, you just chuck a spare in and you're back up and running within a minute.
None of this is 'anti' ZX1. I'm just saying you have options available, so it's worth considering those options. Then again, the UI of the ZX1 would be closer to your Apple than the Chinese DAP UIs.
Haven't heard the M8, so can't compare.
One thing the Hugo left an indelible impression upon me, with, is the fact that it takes no prisoners when it comes to reproducing dynamic swings and peaks in music - this requires decent quality transducers and some care with not raising the volume too high (which is oh-so-tempting to do, with the Hugo!)