I wanted a home theater PC with instant-access to all of my films. My solution was as follows:
(a) Rip all discs to hard drive,
(b) Index and link to files with software solution
In detail:
(a) I chose to go with MakeMKV for most of my ripping. It rips the mpeg2/4 video directly to an mkv file, without reencoding, and you can choose all the tracks you want to go with it. (I.e., some titles I rip multiple audio streams and subtitles, some I take just English 2.0). For me, I just ripped the main title from each film; if I want to see the special features later, I'll take the box down off the shelf and pop the disk in. (Special features don't really matter to me that much.) Each rip averages 3 to 6Gb. Now MKV, while a great file format, isn't compatible with some (especially older) consumer electronics. You can always re-encode, if you really need to make a particular title portable. And for my Blu Ray / HD-DVD titles, I re-encoded anyway. I found a 1080P 6Gb-target-size h.264 two-pass re-encode to be indistinguishable on my 52" TV from the original. In fact, it's probably quite a bit of overkill.
For storage, I have a couple of 3Tb drives in an external enclosure, with a duplicate unit for backup. (Got them for a song before the manic price gouging going on now started!.) So far, it's holding over 500 titles and several TV series, and plenty of room to grow. And I can always increase capacity.
(b) For keeping track of everything, I eventually went with Collectorz.com Movie Collector. I've tried many solutions, both free and payware, and Movie Collector was the one that fit my needs the best. (There is a lot of good software out there -- look around!) As I ripped my collection in my spare time, I simply scanned in the UPC on the back of each film using an old CueCat barcode scanner. The software then populates all of the data for the film. Once the film was ripped, I simply linked the title in Movie Collector to the video file on the hard drives. Now I can visually browse my entire collection and watch any title at the click of a mouse. And it's nice to be able to go, "Hey, how many Humphrey Bogart movies do I own?" and find out with a simple filter.
What worked for me might or might not fit your needs, but hopefully it gives you ideas.