I toyed with that Yamaha combo, but went with an Anthem MRX-1120 receiver and never looked back. It can be spendy, but it is a huge jump up in audio quality over my 5 year old Onkyo receiver (was about $900 at the time) and that Onkyo was a massive leap forward from my previous Pioneer Elite receiver.

So yes, you can get better sound quality depending on the system, and while the Yamaha is nice, it still falls into the same or similar sound camp that lessor expensive receivers do (again, another reason why I stayed with a receiver vs. separates which I really thought that I wanted to go with).

That said, you can only push on-walls so far. I love my 8 M3 on-walls, but they are for surround and Atmos duty only. I have M60 fronts and VP180 center. I don't know if I would have really noticed so much of a night and day improvement in receiver with smaller speakers (on-walls) all around.
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2-M60s, VP180, 8-M3s, SVS 20-39PCi, DIY Sub, 8-Shakers, JVC RS45, Anthem MRX-1120