No, you're not.
No, the quality of the needle doesn't affect the quality of the sound output from your software.
You're right in that the audio signal into the DVS affects tracking reliability, which is based on–among other things–stereo image of the time code signal. High tracking weight or a worn out needle impede tracking performance, more so in absolute mode than relative. And you're right in that the barrier for good enough is a lot lower than if you were playing the audio that the needle reads. But you're wrong in that it's irrelevant.
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