???? Denon, Marantz, Naim and others all have HDMI ARC ports which you can use to directly to the TV for sound. This is becoming increasingly common. So I don’t understand your statement.
Alternatively, like I’ve done with my mother, I could connect her 8 year old Samsung TV via optical to her Denon Ceol N10. The set top box is connected to the tv via HDMI, and the sound is routed to the Denon, no problems. YouTube and Netflix etc work flawlessly too.
Your suggested way seems way too convoluted. That said he could keep his Neo and get a DAC as you said. But I would connect the TV to the DAC directly, assuming his TV has an optical out. And keep his other connections as is.