Before I jump in MCDave, it's clear your setup works great for you, and I am not questioning its usefulness for you, or trying to detract from your well-deserved enjoyment of your system. That being said, you make some statements that cannot pass without comment.
Files, files, files...you're going to have THOUSANDS of them. Much bigger PITA to manage if you ask me.
Having done both, the "files files files" option is way easier. I could understand why someone would find the files to be harder to manage if that wasn't something they routinely dealt with. I don't know if that applies to you. The same organization system you described for your physical media can easily be applied to the digital files. It can be done with extreme ease.
It's also much easier for me because I don't have the physical space in my home to store the entire collection within arm's reach.
You created this PITA yourself by not buying an Oppo universal player.
Since one of the Big Problems was with discs that no longer play, an Oppo is no help with this problem.
The searching isn't going to be any easier or faster when trying to find files.
I must politely state that you do not have an accurate impression of how easily and fast files can be found on a well indexed system. They can all be found faster than you can even rise from the sofa to pull a disc off the shelf.
The searching is due to either not knowing what you want to listen to, in which case files aren't going to help, or the fact that your disc collection isn't organized. My music collection, which consists of NOTHING BUT discs, is organized by genre, and alphabetically within the genre sections. I can find any title I want in about 5 seconds.
Plus the five seconds to get up and walk over to the disc, plus more seconds to get the disc out, place it in the player, and for the disc to load. I'd be halfway through the first track before you've even started, even if you know what you want to listen to before you rise from the chair.
How you can characterize a simple jewel box as a "complete pain in the ass" is beyond me. They don't crack and cloud unless you don't treat them properly. Cardboard? I LOVE it. Greatest invention ever was the cardboard digipack!
If we define "pain in the ass" as extra steps and extra effort, dealing with the physical disc is much more of a "pain in the ass" compared to just playing the files. I can go to the artist, album, and track I want in four clicks of a mouse, including the one to open the software player. I can also setup an entire playlist for an evening and never touch it again, except to pause for extra libations and snacks. If the original poster can find an iOS way to do this, the convenience boost is the same.