I have noticed with my QS8's that it doesnt make to much difference where the are. They disperse the sound due to their design. That does not mean you dont have any distinction in sound. I actually have mine on the ceiling a tad behind the listening position. I think I have to much sound radiation from the cathedral ceiling, but life is about compromise. I wasn't about to give up the pool table in the basement though .

In your setup I would move the rears toward the corner more and flush mount them on the wall. The tweeters will send it to your listening area just fine.

If its a choice between a living room and a HT room downstairs... Use the upstairs for the living room, it looks cozy with the fireplace, and build a HT down.