XLR (balanced) connections were invented to help neutralize interference by having the signal duplicated but out of phase on the wire. When you have a balanced output connected to a balanced input, any noise that affects the duplicated signal will be cancelled out at the input. XLR was designed for professional use where long runs of cable are subject to interference. It's way overkill for casual use.
XLR/balanced transmission also separates the AC ground from the signal negative, which eliminates the possibility of ground loop noise. In a perfect world there would be no such thing as unbalanced lines, but unlike the pro-sound industry, which started with a clean slate circa 1970, consumer electronics never made the change. But all digital transmission will render both unbalanced and balanced lines obsolete in due time.
Thank you both for the information. For my setup, I don't think XLR output is all that necessary. I am still looking for a USB DAC with volume control and headphone out for convenience sake though. Audioengine D1 seems well received by varying group of people (casual, "audiophile", etc.). Any thoughts?
Checkout the HRT Microstreamer. It's got a digitally controlled analog volume control so you don't have to worry about distortions caused by digital volume. You also get the convenience to use the audio controls on your keyboard on many DACs they simply don't work.
Just put the Airmotiv 5's up. They sound great. I like it much more than Yamaha HS50M that I had before, and I find them to be better than Kef X300A. It's been a fun journey, and thanks everyone for your inputs.