Yeah, have the surrounds be in-wall on the back wall wouldn't work too well because the left/right surrounds should really be aimed directly at the listeners.
There is an additional "rear surrounds" channel that can be process in 7.1 processors, but you don't have the room for this. You really need space behind your couch, since the "rear surrounds" are processor ambient sound that will be reflected around on the rear side walls. These "rear surrounds" are fine being mounted in-wall.
If you have to or want to use in-walls for your surrounds, they are definitely best on the side walls, but as you said, there is a physical block at one of the locations.
I generally don't recommend in-wall speakers because once you mount them, you cannot move them. There are some tweaks such as changing the position or toe-in that can improve the sound. It just depends. If you are putting the couch right up against the back wall, then I think you will be fine if you choose to place normal tower speakers for your fronts. Regular speakers have a benefit in that they are completely enclosed. With in-wall, you are basically putting them into an infinite baffle loose enclosure. Not the best, but they work. Though, with in-wall, you generally don't have a problem with tweeter refraction on the edge of the cabinets.
Also, with in-wall speakers, you are limited to using CL rated speaker wire, which are generally the low cost version and most of them are basic stranded (even Audioquest and Kimber). Don't know what your budget is.
Another thing is room acoustics (including bass). Can you give me the exact room size, including the ceiling height?