+1 willemj! It is always good to make up your mind without actually hearing something yourself.
If you have really old speakers you should probably start with replacing them. Some people puts most of their stereo budget in speakers and if you follow this you could look for speakers from $400 up to around $1000.
If you want to upgrade you digital part I have two ideas. You could get the Audioquest Beetle and a Chromecast. That's about $250 and should improve the sound. Or you could sell your amp and get a PS Audio Sprout, it has everything except speakers. If you like to tinker you could build a Raspberry Pi with a soundcard or spdif outputs and connect to your amp.
There is really no point in worrying about the quality of the Yamaha. See here for a test of the earlier AS700, identical but for the lack of digital inputs: http://www.avhub.com.au/product-reviews/hi-fi/yamaha-a-s700-integrated-amplifier-review-and-test-pag...
The results are seriously better than for many audiophile amplifiers costing perhaps ten times more. Its only limitation is the power output at around 2x100 watt rms. If you are using inefficient speakers in a larger room you may want more power. If not, you will be perfectly fine. Since the digital output of the Chromecast Audio has been shown to be bitperfect, there is no issue there either. I have not found any test yet of the Yamaha's internal DAC, but I would not expect anything other than excellent results.
So the only way in which you may be able to improve the sound of your system, is by getting really good modern speakers like the Harbeth M30.1. The rest of your system would be an excellent match even for such expensive speakers. But speaker choice does depend on personal preference, room size and music selection.
I had a Yamaha receiver in the late 70’s and it never disappointed.
I did quite a bit of research on this Yamaha amp before I bought it, so I am very happy with it.
Based on your suggestion and some additional research, I just ordered the Chromecast Audio with the optical cables.
Just left to decide if Tidal is the way to go.
As far as speakers, it’s unfortunate that there are no high-end Audio stores within distance to listen to the Harbeths.
I was actually intrigued with Clayton Shaw’s Spatial Audio speakers, especially at their price point.
Again, thank you for the great information.
Enjoy. The digital output of the Chromecast Audio will certainly be a sonic improvement over the Bluetooth connection.
As for speakers, I am afraid they are expensive, but they also have the biggest impact of the system’s sound. But since you already have speakers, you can take your time to save and listen. Unless your room is very large, the Yamaha would be good to drive the Harbeth M30.1. They would be my personal favourite for a very neutral and accurate speaker in a still modest size. If your room is very small, move one size down to their P3ESR, if the room is rather larger, you may consider their SHL5+.
Harbeth's Alan Shaw is firmly convinced that expensive cables are a waste of money and designs and demonstrates his speakers with basic cable. Quad's genius designer Peter Walker similarly thought they were nonsense. Well designed speakers and amplifiers do not need anything more than bog standard.