Analog output for hifi

The LG OLED have only optical (digital) out and ARC return on one of the HDMI (digital and analog) inputs. 

Sorry but but you will need a DSP receiver or a DAC with optical in.

You can select what the TV sends from the menu (multi-channel or stereo)

The composite audio/video on the TV is likely an input and not an output. Here is how I connect my TV to a 2-channel system, and it works extremely well.

Digital output on the TV to this inexpensive DAC,

https://www.bhphotovideo.com/bnh/controller/home?O=&sku=890577&gclid=COPFr8nf5NACFVU7gQodBk0...

then analog L&R from it to the system. The digital output on the TV will need to be set to PCM. You could always use a more expensive DAC, however, I was pleasantly surprised with the sound of this cheap DAC. It is considered the best of the many at that price. Take a look at how it is built.

https://m.youtube.com/watch?v=XVgFIDiZSHk

This will get things working well, and as I said, you can upgrade to a more expensive DAC later if you desire.

As TLS stated, use the digital output to an inexpensive DAC.  Even a cheap DAC will most likely have better quality than what's in the TV.

tls49

I use a short 3.5 mm to two RCA connectors cable, from the headphone output on my TV. However I get a slight hum in the audio.

Will a DAC used with the optical input to RCA output, on my TV eliminate the hum?

Plain DAC might not work since many TVs, includingPanasonics, output Dolby.  By default they output Dolby with ATSC and PCM with NTSC.  They don't have menu selection.  For that reason I got Samsung.  Check, if your TV has Dolby/PCM menu selection.