Thanks all for the replies. So first of all, as I think will become obvious, I don't think of myself as an audiophile. For one thing, I haven't heard of half the gear people have mentioned
What started as the question, "Where can I put these nice sounding speakers?" has uncovered the more fundamental question: "Given our listening habits and our space, what would, say, a $1000, $2000, $3-4K investment do for us? Are we missing out on a considerably better listening experience?"
And then be done with it, hopefully. In the past I've taken a meandering, experimentalist path, which is difficult now with a young family.
My current set up is something I built up just out of grad school, and I haven't really done anything with it since: an old Marantz 2235 receiver has been the mainstay. Currently we mainly use iTunes or stream Pandora etc., from our iMac or iPhones via an Apple Airport Express and a very cheap Class D amp powering a pair of Polk R15 bookshelf speakers, which currently reside on top of the upper cabinets around our fridge (the head room is 11", and they're about 24" from the wall); less often, we listen to CDs and vinyl: CD player is a plastic Sony Discman, and the TT is a Dual something- bought 2nd hand <$200. I still have many of my CDs, and have only ripped recent ones using Apple lossless. I typically acquire new music as CDs.
We auditioned a pair of Paradigm Prestige 75F floorstanders and 15B book shelves. We're not wedded to the Paradigms- but were impressed- as this is the first time we've ever spent much time at the high end AV store in our area. Both were better than the Polks, we thought, but not immediately obviously so. The 75Fs were good- but frankly didn't feel that much better than our newish stock car stereo. However, once we were listening to some Stevie Wonder we found the music truly engaging- I felt I could breathe more easily, if that makes sense (a little like the first time I played a certain Steinway!), and didn't want to move from the listening couch; just kept wanting to listen to a song we’d heard 100s of times already. The bookshelf speakers were better too, but not $1600 better, to our ears, which maybe don’t deserve a big audio investment...?
We're passive/background listeners: while cooking, dining, entertaining, playing with our toddler. Our tastes are varied- everything from pop to western classical, jazz, Brazilian, Indian classical and bollywood, Broadway show tunes, etc. Our little one enjoys music immensely, in whom we've been able to cultivate more adult tastes (I think music is like food, get them exposed to good stuff early); so I view better listening quality a worthy investment. We have a family room downstairs, sparsely furnished, that we're developing- our piano (not the Steinway) is there, and soon a video screen; perhaps a more traditional stereo set up.
The room is approx 41' long x 12.5' wide x 8.75' high. Hardwood throughout. (It's not a large space by US standards- but it's the SF Bay Area, you know, where housing is like antique jewelry.)
Another plan view with a few dimensions is below (the couch is smaller than depicted in the drawing).
Any thoughts welcome- many thanks in advance!