If the only source you are using with the DVD-R is a line input (the composite and stereo analog from your dish box), then the channel setup is useless. The tuner would only be good for cable and over-the-air analog channels anyway.

The DVI switching and component switching in the 970 are independent, so there would be no conflict. I'd leave the Denon on HDMI - my sketch assumed that there was a DVD player of some sort hiding in there and component was a sure thing, but if you've got a DVD player with HDMI or DVI output and a display that also has one of those that's definitely the way to go. I would want to move the DVD-R from composite to component, though.