Either choice is excellent.
The arcam will make a great transport for the BDA-1. I have one (A BDA-1), and it sounds fantastic. As you point out the BDA-1 also allows you to have a music server too. I don't regret my purchase of the BDA-1 at all -- I think it is a great product and I'm very happy with mine.
I'd use a good coax cable, as short as you can manage with a bnc connector on the end that plugs into the BDA-1. BlueJeans cable can make one up for you at a reasonable price.
http://www.bluejeanscable.com/store/digital-audio/index.htm They want only $16 for a 3 foot rca to bnc cable made from Belden 1694A cable, with 75 ohm canaire connectors (both RCA and BNC). Quite frankly, I believe you're wasting money to spend any more than this. (Recording studios use this sort of cable all over the place.)
-- Ian.