Reply to Itunes WAV conversion

Hey guys this is more a search for the correct information rather than the solution. I was having a basic prob with Traktor not reading some files because they were .m4a files or something like that. Anyways I solved it in iTunes by converting the files...they have .MP3 and .WAV encoder etc. I also read the article on the blog here: "A DJ's Guide to Audio file and bit rates" so I got an understanding of .WAV and 320 bit rates. Question: does or can iTunes successfully convert a regular .mp4 or .mp3 to these higher end formats such as .WAV? I converted one of the songs that wasn't working in Traktor to .WAV format and I got a 30 mb song with extremely high bit rates. Of course it now works in Traktor but I guess I'm in awe that a software can convert files to higher quality? Or is iTunes just displaying wrong bit rates etc.
I'm confused becuase as a graphic designer also the rule of thumb is that files can be scaled down or converted to the another format but blowing up an image will cause distortion you know? How can you add what wasn't there? o.O looking for some nice theory! Thanks guys n happy Sunday!