The state of PC sound in 2016

Hi all, I started out gaming in the master race (playing King's quest, Ultima, Zak McKracken...Darklands (remember microprose??)). I always had a SoundBlaster and spent hours switching IRQ jumpers and fuddling with config.sys-es. Games also had to support a particular soundcard back then (soundblaster, turtle beach, altec lansing, etc) that you would select in the DOS config menus.

Anyway, I fell into peasant land mostly because the two friends I still have left that game, only do consoles (despite my constant nagging about how stupid aiming with your thumbs are!). My kids are on PC mostly playing minecraft though so there's hope for the future!

Now though, I am going to build a proper gaming rig again and wanted to know about the sound setup, but things have gotten a little more confusing than IRQ jumpers, and was looking for some advice on what to do?

Most motherboards have a "sound chip" since the two PCs we have I just plugged the desktop speakers into the back and have never demanded more than 2 channels of sound.

My questions are: what's the deal with sound in games at this stage? How are they achieving surround sound? Are games programmed with some kind of standard 3d sound library that generates 5.1 or 7.1 channels, and all the different sound cards support this standard? Is there a different standard? My AMD Kaveri build has "AMD TrueAudio" but it also just as a regular old Realtek chip so I'm not sure how they're working together if at all...

Furthermore, are these sounds being encoded into a surround sound encoding like Dolby Digital or DTS? Can I simply hook up the S/PDIF optical cable to a receiver and expect surround to work? Or do you pretty much have to buy computer speakers and plug the different speakers into the different matching-colored audio ports? What do you all prefer, the receiver setup or just do computer speakers.

When you play netflix or HBO or something else in a browser, is there any surround encoding being done and output for things that aren't games? Does say Chrome or Firefox support the encodings?

Finally...are there headsets that are generally good enough to replicate surround sound at this point? And if so, how do those work...do they have the 5 or 7 cables attached to your head that you need to plug into the soundcard? Or do they have their own sound processors altogether?

Sorry to pepper you all with all these questions. Just been out of looking for so long, and Google didn't help that much. Video is oddly so much more straightforward!