Hey Kyle, Welcome.
You only want "constructive" suggestions? You may have come to the wrong place.
Good questions.
My original idea was M60 mains, VP150 center, Qs8 surrounds, and EP350 sub.
That sounds pretty good to me. You might even consider the VP100 center. Considering how close you are, plus the fact that you're really only getting direct (not reflected) sound from the center, you could save a little coin there.
The Axiom wizard keeps recommending the EP500, I assume because of the size of the room. However, that is one expensive upgrade. I could upgrade to the M80's (with the EP350) for less than the EP500 (with the M60's).
Yes, your main room is big, and the overall volume of the adjoining rooms makes a big difference for the sub, too. There's no question that the EP500 is a tremendous subwoofer. Please keep in mind that you can always upgrade within the 30 day tryout period, usually without any financial penalty. i.e. if you get the EP350 and are not satisfied, you can probably upgrade to the EP500 by paying the difference and I'll bet Axiom would even spring for the shipping.
Would the M80's be too much for HT use in this small area?
Well, there's really no such thing as "too much". However, you should keep in mind that the M80's are wicked deep speakers (dimensionally, in addition to performance). I can't tell if you are putting the mains on an angle or what, but that extra few inches of depth might make your placement less flexible. And placement can make a pretty huge difference.
Also, getting the M80's is not going to mitigate your need for a good subwoofer, especially for HT.
Would I have problems placing them close to the walls due to being ported? This is one reason I never cared for ported speakers.
All the Axiom mains have ports. I wouldn't worry about it. As long as you can get a few inches of clearance behind them, you'll be fine.
Only one way to find out. I don't know what your frame of reference is. It might be completely satisfactory.
Would I be better off going with a bookshelf system and getting separate speakers for the dining room (which I could always do later even with floorstanding mains)?
Personally, I'm a big fan of the M60 solution. They're wonderful speakers, and don't really cost much more than M22's + stands. Even though your listening position is close to the display and the mains, that is really a pretty big room, even without the dining room.
Also, remember that the Axiom Factory Outlet (see link on store page) saves you 10%. Many people (including me) have received virtually flawless speakers from the FO.
Good luck. Enjoy the journey.
