from what I read, that's supposedly a very good head unit (great bang for your buck).
someone had the same complaint about the bluetooth audio stream sounding "lackluster". turned out that Kenwood sets the BT audio streaming to only play through the front speakers at default. you have to go into the tuner settings and enable the "fade" and adjust the equalizer for the best sound quality.
check the manual or google the steps to find the equalizer and see if that helps.
I have BT streaming in 3 of my cars, but I don't use BT, period. I plug my MP3 player(s) into the USB port and control it from the dash controls instead. so I can't really say for a fact whether a hard line is superior to the bluetooth stream or not, even though I doubt it makes much a difference from what I've heard in friends and families cars.