FM modulator will never be anywhere near a CD quality.
If you really want to make a universal unit without having to use FM modulator then maybe you can try this :
[HU speaker out] > [MP3 player with power AMP] > [Speaker]
The HU speaker output is connected to the MP3 player with a built in power amp. The MP3 player takes in the attenuated signal from the HU. The MP3 player have a built in volume control and source select. The output the from the MP3 player built in AMP is then fed to the existing speakers.
The MP3 player is basically inserted in between the HU and the speaker. The built in AMP replace the FM modulator
Just a though Im sure it will work. The only problem is having to include an AMP and the HU signal may get deteriorated by the time it get to the speakers...and of course the size?