Everyone else has you covered on cables so I'll try to comment on your digital vs. analog question. Unfortunately, you will only know the better route by trying them both. The good news is that interconnects are relatively cheap so you can buy both types of cables and try each setup. Since audio is a preference and each persons' setup is unique, there is no way anyone can tell you which is the better route for you.
I can tell you my experience, but you'll have to understand this is in no way a recommendation for either setup for your situation. I have both the Oppo 93 and 95. It must be noted that my room is a dedicated room for audio. It is sealed and is fairly well treated acoustically and my speakers are properly positioned for optimum sound reproduction with no regards to WAF. For dedicated music listening, I prefer the analog path in my room. For movies I have to use the digital path since I need to use the surround and bass management provided by my receiver to fully utilize all my speakers and subs. There isn't a huge difference though except for the MUCH more prominent bass with the digital connection since I'm using multiple subs vs. just my tower speakers. I would be perfectly happy listening to music in either mode, but analog has an ever so slight edge in my setup. My receiver is a Denon 4311 with Audyssey MultEQ XT32. With Audyssey enabled the digital path sounds VERY similar to the analog path from either Oppo. With Audyssey disabled, the difference is immediately noticeable. Disabling Audyssey causes the audio to sound a little harsh and thin compared to having it enabled.