An interesting thread with very helpful contributions. I was a performing musician for most of my life, though generally alongside another career as I got older. Mark is right, most of us prefer to spend money on our own sound than on hifi. The pandemic turned an intentional break in performing into what is probably now a retirement for me and I started ripping my CDs to a B2 in March 2020. Since then, I've built a very nice hifi, but tried to keep the spending "sensible". Others in my house may not agree.
On Mark's point about live performances: it's one of the ironies of being a musician that, in most forms of music, the audience gets by far the best deal. On-stage, it's mostly about ensuring people can hear themselves and preventing screeching feedback. Even if everyone has in-ear monitors, it's about giving the singers, in particular, a mix in which their own voice is key.
These are some of the things I've learned about hifi, based on my particular perspective:
There's at least as much nonsense talked about audio as there is about musical instruments and amplification. And that's a lot of snake oil.
The biggest influences on how you hear your music are how well the original recording was put together, mixed and mastered, the room you are listening in and then your speakers. But, to a lesser extent, the whole system needs to be balanced, as it can only be as good as the weakest link.
Unless you have the luxury of a dedicated listening room, you are probably wasting your time, and potentially huge amounts of money, squeezing the final few percentage points of supposed quality out of a hifi system. Even then, you will never hear anything better than what was in the original recording. It's surprising how poor some are.
That said, I took a decision that the minimum audio quality I would use is CD level. I was finding Spotify streaming at its highest level (320 kbps) could be enjoyable and entertaining, but there was still something missing. Before deciding, I assembled a number of albums I knew in detail over many years and listened at length to them all at 320kbps, on CD and as higher resolution files (though only up to 24 bit/192kHz). I found I can still hear the difference, and I enjoy the finer details. I like to think I'm listening to the music, not the equipment, as Daniel puts it. But the geeky part of my enjoyment is based on something Mark said: I know what real instruments and voices should sound like and I want some of that. So sometimes I'm appreciating the accuracy of the transients in the cymbal sounds, or how a piece of percussion in the back of the mix cuts through, or how a singer breathes...rather than just listening to the whole piece.
A DAC can be a wonderful thing, and it's important to understand it's not only about the level of detail it reveals. For me, the most important attribute of any DAC is the timing, because that determines the rhythm of what you hear. Assembling all that digital data, converting it to analogue and getting it all to your ears at exactly the right time, in the right order, is amazing when you think about it. You can listen to the same piece of music on two different devices and one will make you tap your foot (or however you get your groove on) and the other will leave you, literally, unmoved. That's timing. A DAC is also about the width and depth of how you perceive what you are hearing and the separation and stereo placement of instruments and voices. Thirdly, it's obvious but worth saying, a DAC has two sides to it, the digital side and the analogue output. Both are important. A good DAC, for example, will ensure that the analogue stereo channels are equally matched in terms of volume. Finally, even the power supply of a DAC can affect the listening experience, primarily in how well it removes or prevents any extraneous electrical interference. I've also found that some DACs sound more clinical and some are more musical. I have no idea why or how, or if I like to imagine it, but I have one that simply sounds, to me, as it should. And that's good enough.