If I purchased a digital game on PC Xbox app, do I need to rebuy the games/dlc again for...

It depends on the games. If they support Play Anywhere, you won't have to repurchase them. If they don't support Play Anywhere, you will have to repurchase them.

I am downloading the DLC from the Microsoft store app on PC, I went to the add-on management section where it has all the DLC listen but there's an icon like this "(!)" saying "this wont work on this device". Yet again the base game is working fine.

This is a digital copy and again I am not on console but PC.

The ability to transfer without having to rebuy the game only applies to digital content. Since you have it on disc, you would either need to purchase it digitally it play on a Series S or purchase a Series X to use the disc drive.

None of that worked. I still show the DLC in my purchases, but in the Xbox Gaming App I am prompted to purchase the DLC again.

Once again...the DLC is confirmed to have been purchased. I have already used it previously. It stopped working yesterday. None of the steps you suggested work. Uninstalling the game and reinstalling didn't work. I have contacted the game developer already, but this seems to be a known issue with the Microsoft Store or the Xbox Gaming App for PC according to other users: https://answers.microsoft.com/en-us/xbox/forum/xba_gapp-xbo_xboxwin/world-war-z-purchased-upgrade-and-items-are/d15525aa-a673-47f1-9c04-db2438486897?auth=1

Hi,

Sounds to me like they aren't signed in with the same account they used before. To download previously purchased games again on a new system or otherwise, they need to be signed in with the same account that purchased the game/s.

Xbox Companion App is for streaming games from an Xbox console to a PC. The Xbox App for PC is used for PC Game Pass, if you don't have Game Pass Ultimate or just Game Pass PC, you don't need to use this app as purchased games can be downloaded using the Windows Store App in Windows 10.