You do have support for the new hi-def codecs if your blu ray has an onboard decoder with multi-channel analog outputs and of course if your receiver has the multi-channel analog inputs. Match them up and you are in business. They are plain old RCA jacks, so you might able to find some old RCAs around the house to get you up and running.
a digital optical connection (aka a TosLink) will only carry PCM/LPCM dolby and dts. LPCM aka PCM is Linear Pulse Code Modulation, it usually refers to CDs or a similar bit stream (16bits 44.1k or 48k sampling rate) 2 channel only for optical and coaxial digital outputs.
Some receivers support multi-channel PCM (CD quality sound) but it works only over HDMI digitally.
Back to your situation. If you only have the optical output, skip PCM, it will only be two channel over optical. Even if your system is in surround, it's going to be simulated, based on the info from only two channels.
Now, dolby and dts. People debate this, but the general agreement is that a higher bit rate (data per second) should yield better sound quality. Dolby runs at 348 and 448k per second, much higher than MP3, but not considering that's spread over 6 channels (5 plus subwoofer) There is another old dolby that runs at over 600k, but I never saw one on DVD. It might be showing up on blu ray.
DTS runs at 754k minimum and maxes out at 1.5mb and that's plain old regular dts found on DVDs and blu ray.
So if optical is your only connection, choose dts whenever you can.
Hope this clears things up.