Using iPod Classic as music server

I finally decided to organize my music on a "server" using an iPod Classic that I got as a hand-me-down from one of my grandsons. In order to replicate music as accurately as possible I'm ripping CDs using Apples lossless CODEC. My understanding of these formats like FLAC and ALAC is that accuracy of replication is 100% and I'm finding that playback using earphones or good buds at least, seems that that is so.

However, when playing through my system, although good, playback using the iPod is not the same as when the source is the CD player. The information seems complete and obviously better than compressed versions I've heard but resolution and detail in the upper frequencies seems to have been softened.

My ability to compare these two sources is straightforward because I can have the same track playing on both sources and A/B using the source selector on the preamp. Now il get to my question.

First I need to say that the present system performs extremely well for my listening tastes so I'm not questioning the existing components. However, there are at least the 2 new issues of concern; one is the quality of the CD transport in the computer and the other is the quality of the iPod playback. I don't mean to imply that the playback from the iPod is terrible. As a matter of fact, it sounds quite good but a little softer/warmer than I prefer for critical listening.

There must be a reason why dedicated music servers are expensive and I'm assuming it has to do with reproduction quality as with other components in a system. I've never seen one so don't even know the process(es) for downloading music to them but, for several reasons, I want to pursue the use of a digital server of some kind. I'm, therefore, asking for corrections of my assumptions as well as some guidance toward making an intelligent choice.

My present system is: Shanling S-100 CD player, Peachtree Audio Nova as a preamp, Peachtree Audio 220 amp and Martin Logan Odyssey speakers.