The B&K reference 70 currently does not decode DD TrueHD or DTS-MA hi def sound tracks from blu ray DVD's. B&K recommends you use the 7.1 analog out from the Oppo 83 and use the Oppo for decoding. If you use HDMI to connect Oppo to Ref 70 for MCH, you will not be able to hear the hi def audio. The Oppo DACs are terrific, and will give you excellent audio performance on DVD and blu ray discs. You would need to use the bass management on the Oppo. The Ref 70 will not do bass management on the external 7.1 input.
As said above by others, the Toslink is a digital signal. For stereo and MCH analog, you would have to use the same 7.1 analog connection, or the dedicated stereo analog out from Oppo.
However, if you use the Toslink or coax digital connection for stereo music, the B&K analog stage is outstanding, and will give you excellent sound quality for music.
I would recommend you use the 7.1 analog out for DVD/BD and MCH music, since you are not getting the benefit of the hi def sound with HDMI with Ref 70. I would also use the Toslink or coax for stereo music to use the excellent B&K DACs and analog stage.
The Ref 70 allows you to set up several presets to select exactly what you want to hear.