Music storage for best possible playback


I have recently ripped my CD/SACDs as FLAC/DSF files and stored them on a Windows 10 laptop (Asus K52F) with 1TB SSD and 8GB RAM. I use Foobar to play these and really like the sound when upsampled to 256 DSD. But I also notice that when I play Spotify it sounds pretty good. One would think that the FLAC/DSF files would sound considerably better than Spotify - almost like night/day. But honestly, it does not sound like that in my system. I was wondering if I am using the full potential of my PC setup or is there a bottleneck, since the Windows OS and the files are on the same drive.

My question is - which is the best way to play the files? Stored on the same hard drive in the laptop OR use an external USB drive OR stream it through the network via a NAS. I do have the ability to hardwire the laptop to the network if required, though I have not attempted it yet. Any advise/suggestions would be helpful. Thanks!
I have done the same (CDs/SACDs and even records into FLAC/DSD). I use a dedicated audio server by SONY with SSD hard drive inside. I also tried laptop computer to DAC, files on the same internal drive as Windows everything. When going through the same DAC, both sources (server and computer) sound the same to me.

On the other hand, Spotify vs. FLAC (on SD card) in the car is like night and day and then some more. Probably not universal, but due to the car stereo limitations.
After doing it your way for years and then moving to a Synology server over WiFi I arrived at the best SQ for me.
Put the files on portable SSD’s and play over streamers. Lose the computer. At that point Spotify was lacking and I moved to Qobuz.
It's simple to transfer playlists.

Thank You @gulpson and @fuzztone
@fuzztone,Would you know if the Oppo USP-205 will be able to stream music from a portable SSD stored somewhere on the network? What software is needed to do that? BTW, Spotify still lacks compared to Qobuz, no doubt. I tried Qobuz and transfered the playlist. Unfortunately many songs were unavailable.