Well, no, remember that plain audio CD's are 16 bit too and those *can* sound marvelous. There are limitations to 16 bit but with regard to listening I'd say that for dynamics neighbours are a larger bottleneck then 16 bit (asuming a linear implementation).

LP filters shouldn't compress, unless of course most of your dynamics are in the high end, in that case you'll end up with less dynamics (but not realy compression as such).

The sad thing is that cheap soundcards have cheap DAC's and cheap DAC's tend to have problems in the high end which is a bad match for fm which already has a tendency towards aliassing. IF you have good ears that can get quite offensive.

Sorry, just packed up the big soundcard so I can't test your piece right now. You could try rendering it to .wav and burning it to CD to test on the nearest hi-fi?