I'll leave the actual setup to the Pi folks, but I did want to possibly help clarify some of the digital stuff (maybe I'll just make it worse, who knows).
So you know in the vinyl chain, in order, you have...
1 - the record
2 - the turntable
3 - the phonostage
4 - the amp
To make the digital chain a little less confusing, I'll compare it to the vinyl chain.
1 - the file (it can come from a computer, server, streaming service, USB, CD, SACD etc)
2 - The transport (this isn't like the turntable in any sense from an engineering standpoint, but it works for this analogy. This is how you get your files to a place where you can get them ready for actual audio. This can be a computer plugged into a DAC, a streamer, a CD player, etc. Many many many "transports" also have DACs built in, and just like turntables, those DACs are of varying quality.)
3 - the DAC (again, terrible engineering analogy, but run with me. The DAC is kind of like the phonostage because even if you have the best files and the best transport - aka best turntable and cart - they do nothing without a DAC -aka phono- to "process" the sound. You also have to consider your DAC for your file types. You certainly aren't there yet, but it's good to know.)
4 - the amp - this is where everything else is the same.
So back to your original statement about digital files on a PC vs Spotify. It all depends.
Spotify at it's best is 320k. Consider this a pressing from United. It gets the job done, usually it doesn't sound too bad, but you know that 9.9 times out of 10 that a MoFi pressing is going to be better.
Now files on your computer are going to be all over the place depending on where they come from. CD rips will be higher than 320k. But do you remember the Napster/LimeWire days? Most of that stuff was 320 AT BEST. A lot of those might have been 160k or lower. 160k is also the audio used by most video streaming services - FYI. But there's the thing, if you're downloading lossless or high res, they should be way better.
Lossless "starts" at 1411K, which is CD quality. Consider this a regular MoFi release. (again, terrible analogies if you're looking at it from engineering). But there are even higher res options, like PCM and DSD. Those are like MoFi Onestep, or actually more often considered equal to a reel to reel. (People will argue about that forever, stick with my analogies here as a concept).
So again, back to your original statement. If your computer has MP3s which are also 320, then Spotify will be basically the same, and a CD or lossless file will be better.
But if you start streaming Tidal which is 1411 and comparing it to MP3 on your computer, Tidal should be better.
So it all comes back to the source. You have to know what file types you're working with. But also, don't get too hung up on file type in my opinion. DSD kind of becomes it's own hobby like vinyl. And I've heard some tracks on Spotify sound great. That comes from having a good DAC with a good analog stage. To an extent, the DAC is like the cartridge and the phonostage. If you have a United Pressing on a nice turntable with a nice cart and nice phonostage, it will certainly sound better than an LP60 with a stock cart and built in phono. (this is what the Google home internal DAC could be compared to). And a MoFi one-step can be played via an LP60, and that would be like running a lossless file through the Google home using it's internal DAC. It might sound better than an MP3, but it won't ever sound as good as it could.
Was that helpful, or did I make it worse?