Bryan, welcome. The first point is that your sketch indicates that there's room at the bottom of the screen for a vertical M2 center, which I'd strongly suggest for a wider and smoother horizontal dispersion. Don't recess the front speakers as shown on the sketch; to minimize reflection and refraction from the stand have them protruding a fraction of an inch forward.
With the couch up against the back wall there's not enough room behind the listeners for back surround speakers in a 7.1 setup to form a rear sound field. Stay with QS side surrounds for 5.1 positioned very close to the corners, mounted either on the back wall or the side walls.
As to the receiver, I'd suggest that you consider either a Denon or Onkyo unit with Audyssey MultEQ auto-calibration and room equalization. The best buys can be had in factory refurbished units(which should be at least as reliable as brand-new ones), with Denon models being available from Dakmart and eCost and Onkyos from Accessories4less and ShopOnkyo.
