Do either digital optical output or direct connection from the cable box both work? Which provides the best sound quality? Ease of use? I have a nice Denon AVR 3805 I would prefer to keep. Thank you for taking time to advise me!
The digital output of the cable box and the digital output of the TV will have equal quality.
Using the TV output simplifies switching and will allow the receiver to work with any other sources (internal or external) connected to the the TV.
Check the TV manual on how to turn on and set the optical output for 5.1.