Need help planning home stereo system utilizing Itunes,iPs, airplay

Hello,
the internet is overwhelming me with Info, so I will ask you guys my question.
How to best build a home stereo system playing my itunes libraries.
Here are my stats:
Itunes library is housed in external 1 TB drive, worked off a Windows laptop ( Sony Viao)
I have and use two Itunes accounts ( one for US and one for Germany store)
Have an older Ipod click ( older gen, ), I phone 4S and Ipad 2,
will be upgrading to new iphone and ipad this year.
What I want to do:
At the moment we have no home stereo system or home theater.  Been happy using the HDMI connector playing video from Ipad to TV. To be honest I do most of my TV viewing directly from the Ipad as it's very transportable.
Music I listen more with headphones, but have been missing my old hi-fi system from 10 years ago, which I no longer have. ( Birthing and raising 2 kids the past 8 years made me forget what I have missed . ).
Anyways it's time to get serious again.
I need to first start with a basic receiver and speakers.
Question 1:
What kind of a receiver do you recommend? There are so many options now besides hooking DVD/CD player to Receiver/tuner. Now you have wifi options ( airplay etc...). where I understand you can stream your itunes movie/music wifi.  We would want a traditional DVD/CD hook up and itunes.
Question 2:
Digitial Quality: Does streaming via airplay to a receiver give digitial quality in music? I read that most Iphone/pod docks only offer analog hookup. What about digital. I know there are a few ie. Onkyo ND-S1 that are digitial. Does airplay give the same quality over wifi as a hook-up??
Question 3: I am willing to have most of my library on a ipod/ipad , but what would be the best way to access my itunes library via the exterrnal drive WITHOUT having to run a computer?? also do Airplay and appletv work together, same thing? or need both?
Question 4: Our house is big and not open. this means investing in a single set- up in main area downstairs. But what are some cheaper options ( Sonos too much money for us) for a system more spread out. Can I run from one receiver  one set of speakers with wire hook-up in main room and wireless elsewhere . and how does the wireless work ( wifi?)
I hope I made sense, kinds still brainstorming in my head.

Hi,
I see no one has taken up the challenge so I'll give it a go
Here's the Apple info for multiple iPods:
How to use multiple iPods with one computer
It has a link to an article on how to share music between different accounts on the same computer which you should read.
1. When you say 'Archive entire CD collection...' I assume you are talking about loading all your CDs into one or more iTunes libraries?
2. Assuming one or more iTunes libraries then all you need to do is set the import options correctly. iTunes>Preferences>Advanced>Importing>Import using Apple Lossless Encoder
3. This would seem to indicate you need one iTunes library. It is the computer that is authorised: iTunes: About Music Store authorization and deauthorization
4. For each user to have unique song ratings you will need multiple iTunes libraries.
If Lossless and AAC are in the same Library then Smart Playlists will do the trick as you can have the condition 'Kind does not contain Apple Lossless'
You can set the view options to show you what Kind of track in iTunes.
Hope this gets you going on the right tracks.
Regards,
Colin R.

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