You said:
"However, I keep seeing posts in these forums saying that bitstreaming is not the recommended way to go and that it is better to let MC decode/process the digital audio stream and to not do any processing on the A/V receiver."
That comment that you read is either a) taken out of a specific context, or b) comes from someone's desire to simplify life by making sweeping generalizations (and there is a huge epidemic of the latter at the moment, including every other area of life).
In terms of audio and sound quality, it all depends on your goal.
If you are listening to music albums, then the best sound quality (within most people's price range) is an Asynchronous USB DAC from the PC feeding analog stereo inputs of a receiver or amplifier. (IMHO, best results are using ASIO output from MC18, but MC's excellent WASAPI implementation is a close second, and it may depend on your DAC as to what is best.)
If you are watching video, then the atmosphere created by the surround channels, give you that Theater experience, and none of those music DACs have more than two channels (at this point), so bitstreaming the Dolby Digital or DTS 5.1 (or 7.1) directly to an A/V receiver is best.
If you are watching a Blu-Ray, and your A/V receiver supports 6 or 8 channels of lossless sound and has HDMI, and your PC supports multichannel lossless audio through HDMI, then in order to get lossless sound quality for your movies, you need to connect your PC to your A/V receiver with HDMI, and adjust MC18 accordingly.
However, the latest version of MC18 added a new feature called ZoneSwitch, which has an easy setup so that music albums play through a stereo DAC, video plays through SP/DIF with bitstreaming, and blu-rays can use HDMI - each has a separate "Zone" and simple rules determine the Zone that is used.