What I can say is that I previously had a DAC HAT made by ALLO; the BOSS DAC 1.2. It all fitted quite nicely in a case.If the sound quality from HAT dac is similar or almost as good as my external DAC then I would rather have HAT dac.
I think ill need to do some reading on what I need as I have no idea what parts, both hardware and software wise.
At the time, I thought the overall SQ was on a par with my Dragonfly Red.
Subsequently I’ve moved on to DACs from Schiit (Modi then Modius) and am very happy with my kit.
Since I purchased the external DACs, ALLO have released a version 2 of the BOSS. I’ve read encouraging reports but never used one. DAC HATs are also available from several other manufacturers. I think ALLO sell the BOSS 2 as both a HAT and a pre built streamer in a nice blue case!
Am I correct in saying that your Arcam r-DAC has a USB input?
If so, then I know what I would probably do if I were in your situation;
I’d buy a RPi version 4, 2 gigabyte. To start with I wouldn’t bother with a HAT, but I’d go USB out from the RPi and USB in on your DAC. I‘m not saying that this would be my long term solution, but it would least give you the opportunitynof seeing if you get on OK with a RPi streamer, before deciding whether you want to incur the extra expense of a DAC HAT.
I’m sure others will be along who have experience of the Arcam DAC to comment in the quality of its USB input.
For software, I’d start off with Moode or Volumio.