I just went from M22s to M80s and the sound difference is substantial, but if you must go the smaller speaker route I highly recommend the M22s and by all reviews of the W22s they should sound nearly the same as the M22s. You do give up a more rich and fuller sound going to the W/M22s from the floor standers. There is no substitute for a full range larger speaker.
I don't think the kids are that big of an issue, I have a 4 and 7yr old and my M80s are in their play area which doubles as the HT room. In your room I think the floor standers would just stick out too much from that entertainment unit and use up too much floor space and I would bet the WAF would be very low with that.
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