Diminishing returns?

soix is correct about being able to hear mass-market receivers vs good audio gear. My bad. I was thinking of all the higher end audio comparisons I've done over the years. That can be work to differentiate above certain levels of good quality. SVS is a good call on speakers as well as subs.

A lot of other interesting and fun suggestions. Since this system appears to need to do double duty, and since the picture implies two people watching, it means two people hearing, so each gets a center image that is either far left or far right depending on seating. Does not sound like fun to me.  (Of course, the OP and sig O could sit audio style, one in front of the other in wood chairs...)  Losing your HT center image is my gripe with telling them to ditch HT.

"....to go stereo instead of multi-channel- frees up so much money you can afford much, much higher quality. Vastly higher quality. As in no comparison higher quality..."

Quality not quantity. 

“I’m currently in the market for floor standing speakers that will serve a dual purpose as both 2ch audio, and the L/R in a 5.1.”
@mlenow,

Sadly, this place is run by 2-ch fanatics (majority of them are deep into Vinyl or should I say anti-digital) Do you see the pattern, they have a one track mind….digital is bad, home theater sucks. Never mind if someone like you loves movies and music alike. Instead of suggesting a good pair of speakers, what you get is biased advice to give up the idea of hybrid system and focus on two center stereo…fabulous!

I suggest read up on some of the speakers listed on hometheaterreview.com and see what peaks your interest within your budget. Once you have narrowed down your choice of speakers, either find a way to audition them at nearest dealer or seek advice here from the actual users.  Good luck! 

https://hometheaterreview.com/equipment-reviews/audio-reviews/floorstanding-and-audiophile-loudspeak...

I love music and videos. I am fortunate enough to have a separate audio and home theater… which is ideal as they have somewhat different requirements and can get in each other’s way. But they can be combined effectively. Some good speakers and a good amp can raise the 2-ch part to a very high level of performance… ultimately limited by the receiver. But people’s lives change… more money, maybe move. Then those expensive speakers and amp can look like a tremendously good decision. Since my interest in music and home theater has persisted over my life, every time I reached for better gear than I necessarily could justify with my other components it has been a great decision in retrospect.

With that Denon it looks like the compromise is already made so might as well run with it, and you can hear whats coming up behind you in the films etc.
I run TV sound via optical through a two channel system set up for music, there’s no problem with centre fill from either end of a three seater but the speakers needed careful placement to achieve a wide listening area with a stable image and tuneful bass. I only have depth into the screen however, not behind me and they’re a bit too dynamic. If I set the volume to hear the dialog the sound effects get to neighbours annoying levels (we’re in a third floor apartment, temporarily) and I end up arguing with my wife about just how loud it needs to be.