Yes vlsi vs1053 is for 500+ 3.144eur so not bad price for that chip.
I think it will run itselfs withouth ARM cpu speed... You just send data to vlsi...
Or as you wrote. Can be OGG, MOD, XM 8bit or 16bit pcm or dac playback soundcard... Amiga or PC Covox like soundcard... But that vlsi is in dac ...