New source.

I currently have a Sony scd-xa5400es, that I bought based on reviews, years ago. It has, and continues to serve me well. It sounds excellent! I have it connected to an ARC Pre and power amp.

I'm considering an upgrade. I'm also considering system synergy as a virtue. I'm thinking of going ARC for a CD player, but don't know where in the line I would need to start at in order for it to be an upgrade over my 5400.

as amazing as the 5400 is, I'm starting to want more. What are your thoughts? I would buy used. I wouldn't want to spend more than 3500. Would this tight budget deem this a waste of time?
'I'm also considering system synergy as a virtue."

I definitely agree with that, but can you list your system? You don't always have to go with the same brand to achieve synergy. Most of the time, choosing components that share common design features is all you need to do.
you would give up SACD if you replace the Sony ENTIRELY with an ARC player ... maybe use a current SOTA outboard DAC with the Sony as transport and also the Sony direct to your preamp for SACD??

you could also consider having the Sony "modded" but you will not get close to your return on investment if/when you sell
I would buy a Oppo 105. This is the best deal in universal players. Stereophile class A rated for only $1199.00 , it does so many things I can't list them here. But one thing it does do is sound very accurate and clean with a tendency toward a bit of warmth. With XLR audio outs and ESS Sabre DAC chipset you cant go wrong. O did I mention, you can have it modded by Dan Wright at Modwright for an additional $2200, you get tubes and a bunch of other stuff. IMHO you cant go wrong with the Oppo its future proof (almost).
Same situation. Older, but good digital gear with limited budget. I decided to try new cables instead - IC's and PC's. It was fun to experiment. Definitely heard differences.