Transcoding Clarification Needed

I am needing some clarification on the current support/status of Transcoding in Kodi.
Is there any Transcoding support in Kodi for streaming?

My old Sharp Aquos with an Android Kodi box has been replaced with a Vizio P-series 4K monitor that has built in “SmartCast” , aka Chromecast aka Googlecast.

Using Yatse to stream from my downstairs Ubuntu KODI HTPC server works great. Passthrough from the monitor to the AVR over TOSLink works well, except that GoogleCast devices do not support DTS passthrough. The Vizio monitor has ARC support for DTS, but my AVR does not.

My goal is to eliminate the need for an external player, and be able to stream 2K and 4K videos to the monitor, and passthrough audio to the AVR from my main Kodi HTPC server.

Last resort would be add a 4k Android box, (requires another ethernet feed), or replace the AVR to one that has ARC supported.

I tried adjusting the Kodi Audio System settings to 2.0 Channels, activated the transcoding feature and disabled the DTS AVR support.
But this had no affect on Streaming to the Vizio Smartcast. Looks like this only works for HDMI.passthrough. (?)

Next option is to try Emby Server with the Emby Kodi plugin.

Are these the only available transcoding solutions for Streaming via Kodi ?