I guess, I really don't understand the difference between loopback and the WDM driver. It seems to me that according to your description they do exactly the same?
Similar but not the same.
Similarities:
1) Redirects all "system audio" into JRiver
Differences:
1) The WDM driver doesn't require any other sound devices and starts automatically when sound begins playing in windows. Because it starts and stops automatically it takes a second to lock on leading to stutters when it starts.
2) The loopback was the "old" functionality that existed before the launch of the WDM driver. Loopback requires another unused sound device to use as a "dummy" (i.e. the motherboard soundcard or an HDMI output) and has to be manually turned on to redirect audio. Because you can manually turn it on, it stays turned on until you stop it or play something else, so it doesn't have the "lock on" issues the WDM drivers does, but is less "automagic." It's still useful if you want a system that's always listening on the device like someone upthread asked for (i.e. if you're using JRiver solely for DSP and are using something else as a playback front-end).