HT4437 want to air play and apple tv in one device. possible iPhone 5

I am finding it all a little confusing.  I like the functionality of the airport express but wonder if the apple tv device allows the same with music and also adds the option to display on the tv?

I currently use an ethernet connection to link my SONY internet tv to my broadband.  I watch iplayer and lovefilm on the TV.  I want to be able to use Airplay to link my itunes via my iphone/ipod or ipad to the AV system.  I have phone connections and optical connections on my AV system but not ethernet or Airplay.

Can I use the apple TV to act as both the video display, keep my options to watch internet TV but also added options around the Apple TV AND with the same device connect the optical link to my AV system and enjoy itunes music?

Thanks