I can imagine that the draw from a M500 would tax fuse in a C1. I would certainly think some other way to trigger power-on, rather than directly through the C1. It also sounds more like you want a power "button" that simply fits within what the available openings in the M500 face are, so that you preserve its integrity - definitely a credit to you, there!
The VU meters could certainly be fun to try different things with. You could probably put a lot more info on them, too - perhaps a running after power, highest peak power, even some system health info if you could safely tap into the right spots (I'll wager you can). All without any adverse effect on the existing faceplate. For that matter, you might even be able to do something like just have a LCD display BEHIND the existing VU meters for lighting and other info.
Curiosity can be good, but as you can see by my avatar, I have cats, and we all know what too much curiosity leads too there. If I go too far, folks, please tell me to behave.
I would certainly advocate a better power supply for the RPi regardless. I managed to kill the one that came with mine before I even got it to go live - it would boot up and immediately claim the voltage was too low, and shut down again. That's without anything connected. Like you, my soft/digital music is on my PC, but having it direct on the RPi, at least for a bunch of it, might make for better access.
Have you found a good structure for your music? Mine is very haphazard right now - I pretend it's a case of experimenting with different layouts, but the reality is it just got thrown together.
I did pick the Allo Boss because it was "supposed" to have decent quality sound and a good low end, but to be honest, it's probably beyond what I could really hear, especially since all too much of what I have is in MP3 form, rather than FLAC. I tend to use it more for quick, light listening and to decide if I really want to get an album. If I do, I still tend towards buying a CD, rather than downloads. All that having been said, everything I've seen on the DAC you have says is still no slouch. It's going to take the pure digital and do quite a reasonable job of making analogue sounds out of it.
Now THAT sounds intriguing! I love the idea of being add new while preserving the old - the best of both worlds. There is so much potential in that equipment. I still cringe when I read the specs on most newer Surround systems. When Carver and Sunfire were at their peaks, we would never have tolerated the distortion levels that most gear now seems to brush off as being just fine.
Credit to both of you for taking the stand of preserving the integrity of the equipment, but doing careful and well thought 'upgrades.' That is exactly why I wound up going down the OCCD rabbit hole - I realized I could have the system I always dreamed of, and get the careful modernizations that I also wanted. If it wasn't for people like you, who make those dreams possible, we would probably either be getting those high-distortion receivers, or having to by ultra-boutique amps. Thank You!!!!