My TV has optical and HDMI audio out but no RCA and I don't really have the money now to upgrade my reciever. But what I can afford is either HDMI or optical to RCA converter equipment but I want to know which of two might be better before I buy it. Is their a difference? Are they bottlenecked by RCA?
Also if you do have answer, what's the best converter cause I've seen tons that seem mostly identical in terms of design in feature but maybe theirs an underlying thing I'm missing that I can here for.
There will be no quality difference using HDMI-ARC or the optical output.
You may lose an HDMI input if you use ARC.
Check your TV audio menu to make sure it can be set to output in PCM stereo. Most optical to analog converters won't handle 5.1 bitstream output.
Given your application I doubt spending a lot will make a difference.
You could also find a used AVR that doesn't have HDMI but does have digital audio inputs. They don't go for much and may be better than your present AVR. An old Marantz for instance would sound better than most.