You would have to make sure that your system can delay all of the channels the right amount to keep them in sync with the SL since it is further away, and then make sure that the audio is in sync with the video. I would think that any near-current model receiver would be able to handle this OK. I just think that trying to force a 7.1 system into the space will involve a number of compromises vs. a properly setup 5.1 setup.

As for the channel deal, I find that it isn't the "side surrounds" that are dropped out when playing 5.1 on a 7.1 setup, but in fact it is the "rear surrounds" that are cut from the mix. That is because the key difference between 5.1 and 7.1 in a proper setup is the adding of the 2 rear/back channels, not the addition of the "side" surrounds. Those "side" surrounds are really the surround channels in a 5.1 config.

Of course, your receiver should be able to simulate the 2 additional rear channels when playing 5.1 audio in a 7.1 setup.

As for fishing the wires, I managed to (not without some work) fish my surround channel wiring through 1/2" holes I drilled into my walls. I had 2 layers of 5/8" drywall, GreenGlue, vapor barrier, and insulation fighting me, but it can be done with a metal hook made out of a coat hanger and a little patience.
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