I did what Mark describes. For my cd collection I created two folders, CD archive FLAC, CD Archive MP3, and let dbPoweramp do its thing. For MP3 I selected highest quality VBR. I did this for portability, but everything supports FLAC so I haven't used the MP3s at all.
I have the same receiver and like it a lot. No bass management is my only gripe, and as with most devices that support DLNA media playback is rudimentary. This is where devices like Logitech Squeezebox come in handy. My computer is directly connected, which is beneficial, but I also use Squeezebox because it gives me my local collection and all streaming services all in one solution, controlled by a beautiful Android app. Unfortunately its been discontinued.
Logitech Media Server, foobar2000, and Plex for mobile devices are my media servers.
Onkyo has a remote app. Nothing to write home about but it's convenient. You can browse through DLNA content, access the built in streaming apps and control power and volume settings, including both zones.