The 981's left, right, center, left surround, right surround, and sub go to the left, right, center, left surround, right surround, and sub on the 1070 - the left and right surround backs on the 1070 are left empty and the left/right mixed on the 981 are not needed (they're duplicates of the other left/right outputs, used for purely stereo output).

A SACD will only work via the multichannel analog connections - it won't output via optical or coaxial digital. I'd recomment setting the SACD priority on the General Setup page to multichannel. On the Speaker Setup page, go with downmix set to 5.1 CH, all speakers large, and the sub on.