So lets say a movie contains the following audio tracks:

English in TrueHD or PCM
Spanish in DD
French DD
Italian DD

If I switch to Spanish, does this mean all of the audio is now being put out in DD instead of the TrueHD/PCM audio track? Or just the dialogue is output as DD & the rest of the audio is still TrueHD/PCM?

Each audio track will be a new"file" so everything will be in DD or what's listed.
Same goes for DVD.

They Primary track almost always has the best audio. Which is often based on the country its made in. So import movies may have say french DTS HD MA on track1 but english DTS on track 2 even if its the Orginal laguage.

With secondary audio mixing, I believe it would be possible to do a lossless mix, but have a dialogue channel in another language that could be substituted for the English center channel. However, I don't see that taking off, because they have to do separate mixes for DVD anyway, and not all of the dialogue is even in the center.