SPDIF is a collective term for optical and coaxial digital, it is the hardware standards and a protocol.
https://en.wikipedia.org/wiki/S/PDIF
Your M11S has SPDIF out but it is the coaxial version not optical, earlier M11 had optical as well as coaxial but that was dropped around the Plus era as best I understand.
The 3.5mm coaxial plugs into the 3.5mm headphone jack but you need to go into the audio setting and change the 3.5mm output from analog (PO or LO) to digital (SPDIF). Changing the settings shuts down the analog output and turns on the digital coaxial output using only two terminals of the 4 terminal 3.5mm.
On some larger recent FiiO devices the coaxial is done with RCA, the M11 doesn't have the real estate for that. See image below, latest Q15 with RCA for coaxial.
The USB hub seems like a fine idea but i would not leave the M11 plugged in constantly unless there is some way on the hub to disable charging to the port that the M11 is plugged into. Constantly charging the battery even with an 80% limit set up is a recipe for short battery life. You could have the hub set up and just pull the M11 USB cable and tuck it away, sounds like you are a neat freak like me, cable management is critically important !