When to use an audio interface?

Ive been dabbling with an s4 mk2. I want to add in a Arturia minilab mk2 to control abelton. Im currently linking to abelton with abelton live link.

I can either let abelton play thru the s4 soundcard.. or set the mac to play out of its audio card.. and use a headphone to rca jack back in to the s4 as a live input on deck C. At first i thought this would work and I could retain equalizer and effects.. but the audio sounds terrible?

is this what an audio interface is for? Route imac audio thru an interface before going back into the S4? Or something to this effect?