Core and DSD Files

I use the Core supplying my DAC via the SPDIF connection.
Of the few DSD files I have, I only noticed recently the Core app was indicating DSD, the DAC indicated 16bit 176kHz.
I contacted Support and eventually received the explanation, the Core is limited in that it will not output DSD via the SPDIF only PCM and has to process the signal to 16bit 176kHz in accordance with Industry Standard.
Has anyone done listening trials against true native DSD file and this 16bit 176kHz file output from the Core?
Would it be better to keep clear of DSD versions and stick with 24bit?
Sorry but not being fully tech aware, would I be correct in saying, if I purchased a streamer unit, then this would be accessible on my network and would then extract these DSD files from the Core via its ethernet connection?

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