This solves my problem: Fiio BTR5
Don't have to worry if the phone doesn't have 3.5mm plug. This unit even supports balanced out with 2.5mm TRRS.

Unless you get Bluetooth earbuds, then that's another story altogether.

I didn't suggest MP3 player because it's a standalone device. If you are comfortable with another device, perhaps there are some cheaper alternatives which I may not really surveyed. Nevertheless, you may want to test it out first to hear if you like the particular sound. I tried the Shanling Bluetooth receiver and didn't like the sound much. Fiio suits my preference in that price bracket, and it's a Dac-Amp combo with bluetooth capability so it fits my requirement.

BTR5 connects to your phone via Bluetooth. It has a 3.5mm connector so I can connect my earphones to it, which solves the problem of phones not having 3.5mm connector. If I like, I can even use the 2.5mm connector it has, which should offer even better sound quality.

Besides, BTR5 bypasses the internal sound card of the phone as the main sound processing happens at BTR5, and the sound card at BTR5 should be more technically capable than most phones' sound card.

I suppose it's considered HQ? Output 80mW for 3.5mm and 240mW for 2.5mm is considered powerful enough for most earphones I think.

I'm not sure on the surround sound part as it doesn't have build in sound enhancer. Perhaps you can use enhancer (i.e. surround sound effect) on your phone/PC and hear if it makes a difference.

Regarding lag, if it's not too far then I think the playback is quite seamless. I tried standing furthest like 1~2m away from phone. However, sometimes i do have occasional short lag (like once every 2~3 mins for less than 1 second), and I'm unsure if it's due to my phone or BTR5's bluetooth issue.

I understand. Therefore, I can't be too sure if it won't. User experience may differ. So far it's like 90% of the time it won't have any issue. But for serious gaming, like what you've mentioned on the need to pick up all kinds of sound in real time, then perhaps the best choice is still wired setup. Using wireless (bluetooth) will always leave a room for possible gap between the two devices (source and playback device).