Lossless means it sounds exactly like the CD copy, should it exist

You're bang on with everything but this, if you're getting FLACs from the source, you may be getting higher quality than CD which is 16-bit 44.1khz. I've got many 24-bit 96khz FLACs in my collection

Your last point about Bluetooth is such a great one though. Recompression of already compressed audio is a much worse end result than compressing uncompressed audio one time (and before anyone says it, basically no one is listening to lossless Bluetooth audio)