The text size changes automatically. If you use the IR remote, it goes to the "10 foot" (~3m) interface, because that's about the distance from which it is readable (depending on lighting, your eyesight, etc.). If you approach the SB Touch, the built-in proximity sensor senses this and changes to the "3 foot" (~1m) interface, which is smaller text. Of course, if you touch the screen it also switches to the 3-foot interface. I don't imagine many (any?) people would actually be picking up the SBT to control it -- it sits on a shelf just like an SB3. I can't comment on the audio quality of the digital out because I use the analog outs.
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