Best 976 settings for stereo music

I am considering the purchase of a 976 and would like some input from existing owners regarding the configuration options for music.

I plan to use one set of inputs to connect a phono preamp. Will it be possible for me to set the default of that 976 input to Analog Stereo.

One of the other inputs will be used for a Blu Ray player. If I want to minimize use of the DSP when playing CDs in the Blu Ray player should I plan to turn off the DSP in the 976 or just put the 976 in Stereo mode.

I believe that anything connected via analog bypasses the DSP entirely (there are no ADCs to convert analog to digital for processing, you still get bass management). For digital sources (HDMI or SPDIF / TOSLINK) there is a direct remote button to enable/disable the DSP based EQ, and you can directly switch to stereo processing or cycle through surround modes. If you connect your bluray using both digital and analog you can set up separate sources that you can choose between on the receiver (depending on how you set up the outputs on the player).

Hope that made sense - read through the owners manual for some good details.

This is not acurate. The 7.1 input is the only one that is 100% analog. The four analog stereo inputs are digitized, since the bass management is done in DSP. As a proof, have the FM tuner play or any of the four analog stereo input selected, hit the Info button and look closely at the display. You will see "PCM" appear briefly. FM is as analog as it gets, so if the processor sees it as PCM, you can be sure that is because it was digitized!

The stereo analog inputs do get converted, as Deromax mentioned for Bass Management.

The 7.1 inputs are pure analog, through and through.

If you are integrating a subwoofer into the two channel experience, stereo analog inputs in stereo mode is the way to go.

DSP bypass is to prohibit the ability to apply any post processing modes - this is a global system setting, so something to consider before enabling.

Is it possible to route the L-R analog signals to the 7.1 input (Front L -Front R) and still get subwoofer output?

No, it's not possible. The 7.1 inputs are: each channel input to achieve an output for such channel. This is true for the sub channel too. You won't get an output to the sub if you don't have an input at the sub-in for the 7.1 direct inputs.

Previously stated; that the best way for stereo with sub integration is to connect stereo analog inputs in stereo mode. My player source does not provide for analog connections.
What is the best way too output 2.1 specifically, SACD playing in stereo mode into the 976?

There's a stereo button on the remote. You can connect through an optical cable and select the stereo mode. Set your speakers to small and the crossover will direct the low frequencies to your sub.