Optical does not have the necessary bandwidth to transmit HD/lossless audio - only ac3 & dts for 6 (5.1) channels.
If you want to experience HD/lossless audio (5.1), you will need to use the analogue outputs & hope that your receiver can take the higher frequency, and that the BD-P1200 has decoding of the HD audio streams, rather than bitstreaming.
7.1 Channel lossless audio requires HDMI.
A quick look at the specs shows that the Samsung has 6.1 output as RCA/analogue and your Receiver has 7.1 input using RCA/Analogue
You can get 6.1 Sound. Keep the cables as short as possible, and you'll be fine