It can work either way. Stereo sources will just use L/R (and the sub if you configure it for 2.1 w/ bass management). Or, you can apply various surround modes in the receiver to produce 5.1 from stereo sources.
If you have a 5.1 system, then you are better off running audio from each of your playback devices directly to the receiver instead of running them through the TV. Most TVs output stereo from external devices. They will only do DD 5.1 from their internal ATSC and QAM tuners fed by off-air antennas and direct cable feeds. So, if you play a movie with a 5.1 soundtrack, the TV output will be stereo while the direct feed to the receiver will be 5.1. If you get a receiver with lossless decoders, you will also be able to process dts-MA and TrueHD soundtracks if you connect the disc player to the AVR with HDMI.
btw, there's no need to start a new thread about this. It would have been better to continue in the first one you opened.