A meta-analysis led by the Queen Mary University of London found that people could distinguish between file formats in controlled settings. Variables such as the length of a sample heard could impact the ability to hear differences. But notably, their ability to identify the different formats was better when the participants had received extensive training; those subjects could hear the differences between formats around 60% of the time.
So yes, people such as Neil Young who have been immersed in the minutiae of not just music but also its production, will probably notice differences in file formats. But the average listener may not have that same experience. Also, there’s the weakest-link factor: no matter how advanced a file format is, listening on cheap headphones will negate those details.