read audio files and send them by SPDIF
That looks like a good chip but TOSLINK is just a serial NRZ data link that requires a TOSLINK IC from Toshiba or equiv. TODX2850A using PCM data.

SPDIF is the wired NRZ PCM signal.


  You must have a very specific SPDIF digital cable. While a SPDIF coaxial connection looks like an RCA analog type connection, it is not the same. SPDIF is a stereo digital connection


For PCM Audio all you need a CABLE, 24”  SPDIF DIGITAL &amp; CD AUDIO or equiv. To design your own PCB, you start with a list of all interface specs and protocols for compressed digital audio then a block diagram. Your request is too big. Go buy one.

HOW TO convert video. Use different digital cables to suit your source.  

Consider a Raspberry Pi with Flash USB input to analog audio out or to your DAC as a serial data stream.

https://www.raspberrypi.org/blog/tinkernut-diy-pi-zero-audio/

Last consideration

https://achanmix.blogspot.com/2018/03/ea-bt4hs_92.html


  • ATS250X is a third generation single-chip highly-integrated digital music system solution for devices such as dedicated audio Boombox and player. It includes a high performance DSP with embedded RAM and ROM, ADPCM record capabilities and USB interface for downloading music and uploading voice recordings.
  
  • ATS250X also provides an interface to SPDIF, Nor flash memory, LED/LCD/LCM, button and switch inputs, headphones, and microphone, and FM radio input and control. It supports MP3, WMA and other digital audio standards. For devices like USB-Disk, it can act as a USB mass storage and slave device to personal computer system. The Chip has low power consumption to allow long battery life and an efficient flexible on-chip DC-DC converter that allows many different battery configurations, including 1xAA, 1xAAA and Li-on. The built-in Sigma-Delta D/A includes a headphone driver to directly drive low impedance headphones. The A/D
  
  • includes inputs for both Microphone and Analog Audio in to support voice recording and FM radio integration features. Thus, it provides a true ’ALL-IN-ONE’ solution that is ideally suited for highly optimized digital audio  Boombox and player.


• Support WMA Decoder and Other Digital Audio Standards
    • Digital Voice Recording (ADPCM）
    • On-chip DSP , integrated MCU with DSU
    • External SPI Nor flash
    • Support the following memory card interface
      - Secure Digital Card Specification Version 2.0(1/4-bit mode)
      - Memory Stick Version 1.43(1/4-bit mode)
      - Memory Stick Pro Version 1.02(1/4-bit mode)
      - Memory Stick Pro-HG Version 1.01(1/4/8-bit mode)
    • Support 24MHz OSC with on-chip PLL for MCU and about 32KHz RC oscillator
    • 2-channel DMA,1-channel CTC and interrupt controller for MCU
    • Energy saving with dynamic power management, supporting 1xAA, 1xAAA and Li-on battery. 
    • Build in Stereo 20-bit Sigma-Delta D/A
    • Enough GPIOs For all applications
    • Support TWI/SPI/UART/IRC/SPDIF interface
    • Support external 8080 Series LCM driver interface
    • Support FM Radio input and 41 levels volume control
    • Support Stereo 21-bit Sigma-Delta A/D for Microphone/FM Input, sample rate at 8/12/16/22/24/32/48KHz
    • D/A+PA SNR :without A weight&gt;91dB
    • A/D SNR &gt;90dB ,support Difference/2-channle Microphone
    • Headphone driver output 2x20Mw @16ohm
    • Standby Leakage Current: &lt;50uA
    • Low Power Consumption: &lt;40mW@VDD=1.6V at typical Audio decoder solution