I doubt that the Sport is the right player to explore the benefit from lossless against lossy. My two units play Flac files with some crackle. Maybe it’s because of compression level 8 (highest), but I lost interest to try any further since I can’t hear a difference between well-encoded (high-bitrate) MP3s and Flac using the Sport. It isn’t a high-end player to begin with, and somehow I doubt that it’s really worth using lossless with it even when you can indentify it.
However, for ripping I use the trusty EAC (Exact Audio Copy) producing Wave files (which I edit on a regular basis to add crossfeed), for encoding to MP3 I use LAME with RazorLame as frontend, for encoding to Flac I use Foobar2000, for tagging I use MP3Tag.
Formatting can be done on the player itself, probably the best option anyway. Officially it needs FAT32, but it has worked with ExFat as well when I tried it.
In-ear monitors can be very bassy, don’t underestimate them! I’m not very familiar with «reasonably priced» IEMs, the cheapest being Phonak Audeo PFE 112, Etymotic ER-4PT and Sennheiser IE8 (newer model: IE 80), which are very good earphones for the price. The ones I regularly use are Shure SE846, Sennheiser IE 800 and Shure SE535. These are quite expensive earphones, but I guess it’s best to enter this quality level if you’re really into lossless from a portable system. I’m not saying it’s impossible to hear a difference between lossless and lossy with lesser earphones, though.