I answered my own questions by attaching my second backup drive to my Mac laptop (which is hard-wired to my DAC).
The Mac connected directly to the hard drive read the Apple Lossless files created by the PC. The sound quality was SIGNIFICANTLY better than when the Mac accessed the files wirelessly from the PC iTunes 'shared' mode. FINALLY, I heard Audiophile quality sound from my computer music files!
I'm not sure if I would get the same great quality if the hard drive was on a wireless network, but for now, I am happy to just have the external hard drive plugged into my Mac laptop.
What I also found, was that the Mac could not access the iTunes Music Library (names of albums, songs, playlists, etc.). I had to have my Mac iTunes create that all over again, and with 300 gb of Apple Lossless files, this took my Mac about 6 hours to create. Now that it's created I'm good to go, though I do have to create all my playlists again from scratch.
But I am so excited to finally have great sound from these files.