Spotify is a higher quality signal than Pandora, and for an extra $10 a month, Tidal is very similar to Spotify, and has an option to get an even higher quality signal than (CD quality and hi-res) for an extra $10 a month, although you need a very good system to really hear the difference. For most people, Spotify or the normal Tidal is just fine. Yes, they can be used anywhere, although it uses data just like Pandora does. When you're connected to wifi, it's no problem, but when you're on the road, it uses your cellular data. That's not a problem for some people who have a good data plan on their cell phone. Others who have limited data might not want to use it a lot. That's where XM might be better.
Either way, you definitely don't need an external DAC for your purposes. If you don't like having to plug your phone into a wire, there are wireless options, but that's a whole different can of worms.