confused and don't know what to do

RAW33,

As previously mentioned audition as many gear as you can and come to your own conclusion. I am sure you noticed that everyone here claims they have the best system and this is simply because they picked out what they thought was right for them. As I mentioned pick out the speakers that call out to you sonically,
etc. and do your best to match the rest to balance out the speakers to your taste.

Everyone here has the best intention to help, but all these recommendations will become overwhelming. Bottom line is you will end up picking your own gear in the end by auditioning, reading reputable reviews, etc. Don’t get me wrong there are very good topics and information provided here that you will benefit from for your setup, but in the end it is your call. I already mentioned this previously, read on tweeter material like berillium, titanium, etc., since these will influence the speaker sound to a large degree.
Anyway, this research was fun for me because I learned a lot and I was turned on to great music along the way.

Yes, it is overwhelming but I feel that I have definitely benefited from much of the knowledge and helpful advice I gained from reading many of these posts. I really do appreciate everyones opinion.  The intricacies and the details that go in to a sound system are fascinating and I have just barely scraped the surface.  I am trying to gain understanding  but see that will take me awhile and much experimenting and experiencing. I look forward to an interesting journey. As you say, the system has to be right for me and I am sure I will make mistakes in my choices from which I will learn. I am just hoping those mistakes aren't too expensive. LOL!

We live in a similar condo, all downstairs is a combined living, dining, kitchen with sliding glass on one end.  I use Sennheiser RS 185 wireless headphones for HT and a dedicated 2 channel stereo for music. The Sennheisers work great and a second pair can be added. My comment is more of a practical one though.  Subs and in wall speakers.  You’ve got neighbors.  In wall speaker in a common wall is a definite no go.  So is cranking the subs, even a little.  Food for thought.  

Starting with a pair of B&W 804D is definitely a wrong move. In addition, the "must have" of a 5.1 system is a sub, which is not practical if you live in an apartment. B&W Diamond speakers need a hefty amplifier to drive them, and the cost is very close to the cost of the 804's. On top of that are streamer, DAC, and AVR. Finally, a receiver, regardless of the brand, is not for again, the 804's. Five year ago, I had a $2000 surround system. After buying a pair of Focal Electra 1038Be, I spent a total almost $50K just to match the front speakers.

Got to agree with the plan of using a surround sound receiver with a tasty integrated to drive the left and right fronts. The integrated will provide a better input for your 2 channel source(LP CD ...).The receiver will give you the better movie sound with the advantage of freeing up some of the receivers watts for the other channels and increasing the quality of the two fronts.