Understood!
Remember, analog audio operates in realtime... what the player outputs, the amplifier amplifies, and the speakers play, all simultaneously.
In the purely digital domain, in PCs at least, the transmission of data occurs much faster than the "real time" of the information when used, so it isn't affected by deficits in timing. This is very different from the time-domain operation of a PCM (pulse code modulation) digital audio signal, which can be significantly affected by the speed and synchronization of the sending and receiving components.
In a PC, data that is stored on the hard drive can be retrieved, transmitted, and processed many orders of magnitude faster than the raw transmission rate of traditional PCM, making it impervious to the deviations in pulse timing known as "jitter".
Ideally, for a home disc transport, one could build an ideal transport/DAC arrangement by utilizing a large PCM cache and pulling audio off of the CD in raw data form to load into cache, and then utilizing a word length detection algorithm to sync the DAC to the PCM stream coming from cache. Some portable players do this with good effect, I'm not sure why there aren't more home players that take this approach, it seems like it would be relatively simple using a standard high quality PC CD-ROM drive, a small hard drive, and some sort of embedded operating system to handle the I/O and the decoding.
Hmm, that's an idea...

That's basically what you have in your Squeezebox, only without the integrated drive. You've done the audio extraction step ahead of time, and are just reproducing the audio from its highly portable stored format.
That's the whole beauty of the digital audio revolution: if you divorce digital music reproduction from the disadvantages of the time domain, then you make the whole system more robust and flexible, and resistant to degradation in reproduced quality.