Please help! with best hook-up on older unit

[mosteve]

I am pretty new to blu-ray and just purchased a new tv and blu-ray due to the ending of analog tv and my tv was very old. I love the blu-ray so much that I have decided to buy one for my older movie room but I am not sure how good it will look and sound or how to hook it up.

My TV is an old panny 53tw rear projection 1080i with dvi and composite input
My reciever is an old yamaha 5640 6.1 non hdmi

I am guessing I use hdmi to dvi cable to go from blu-ray player to tv for pic.

For audio whats my best option do I use optic cable from blu-ray to reciever or is there a better way and what do I set blu-ray player to pcm, bitstream or bitstream audiophile?