There seems to be some confusion about what various terms actually mean and how different connections actually work here:
- A DAC is a Digital to Analog Converter, it takes digital signals in, and kicks out an analog signal. At some point in the chain this is required because the headphones (or speakers) work with analog signals, and are driven by amplifiers that expect analog signals.
- "USB DAC" is a bit of a misnomer, and marketing types have taken the phrase and run with it. USB itself is not a digital audio standard, its a peripheral interconnect bus for computers, and "USB DACs" are really better thought of and called "USB soundcards" (but that fell out of fashion years ago) - they're complete audio controllers that connect to the host computer via USB, and provide whatever outputs the designer offers (e.g. some just provide stereo analog out, some provide multi-channel connections, or headphone amplifiers and outputs, or digital outputs, etc).
- S/PDIF is a digital audio interface, and is used to carry digital audio from one point to another. A conventional DAC will interface via S/PDIF.
So to your questions:
- If you connect your AVR (its a lot more than an amplifier) via S/PDIF, you're using the AVR's built-in DAC to convert that signal to analog (and then its off into whatever other bits the receiver offers, like DSPs, before going into the pre and power amplifier sections). You will be using your soundcard as a transport in this configuration - you've bypassed its analog outputs, but not necessarily its driver stack and/or other functionality (this depends heavily on the specific soundcard in question - some will not pass their DSP enhancements or features via digital out, and some will).
- If you went with a USB device, you would be entirely bypassing your soundcard (specifically, replacing it with the USB device). Using a USB to S/PDIF bridge (there's no "DAC" there) will simply change the S/PDIF source. This may or may not afford more functionality depending on what your soundcard can presently do.
- Given that you're using an AVR, its probably safe to assume there is no "straight through" analog path, but instead it is very likely going through an AD/DA section in order to bring the AVR's DSPs into the mix. Because of this, changing DACs to the analog input section may or may not yield any significant benefits (and to add to that, differences between DACs can be fairly subtle).
- Changing the source of S/PDIF signal is unlikely to have a noticeable impact on quality.
I would probably only upgrade if you need some functionality that your soundcard lacks, or if you want to switch to a device that provides headphone output to completely supersede the AVR for driving your headphones (and imho amplifiers have a bigger potential impact on sound quality than DACs or digital sources).