upgrade what

I was just reading a review, or was it a YouTube, about Focal speakers. I'm considering a bookshelf speaker for my system as well. Evidently, they are not well know for their imaging and separation. Not bad but not good either. 

I'd be interested in knowing what you end up with. Thinking about Elac,...we'll see.

I agree with @hilde45 get the room squared away before you start replacing gear.  Have you experimented with speaker placement and  toe-in?

What is your room look like?  System brightness is dealt with easily with a few panels.  

I would venture a guess adding a DAC will address some of your issues.  I would bypass the Denon players internal DAC's up-sampling filters and DSP.

I would check setup and room acoustics first. If you create a virtual system and put photos of your system it can help us a lot, to help you. 

If you occasionally think it is a bit bright... then it most likely is always much too bright and not fully fleshed out. 

Yes upgrade speakers. They make a huge difference.  I would recommend looking at Sonus Faber Sonnet 2, KEF Reference, Harbeth Compact... or better for these brands. 

If you want a significant improvement that is really obvious, I always budget at least 2x or more.