I have a 2CH/HT setup in a large 20X25 ft room with a 8X12 ft nook(soon to walled in) on one side. I am running a 7.1 system using a Emotiva XMC-1 preamp, I have a Emotiva UPA-700 power amp powering my center and 4 surround channels and a Parasound 2125v2 powering my front left and right channels. For HT/surround or regular tv use I run the XMC-1 in Dirac Live mode, for 2 channel use I run the XMC-1 in Reference mode (no processing at all) or Direct mode (bass management and minimal processing). The XMC-1 sounds GREAT in 2 channel and just as good in surround mode. I got the XMC-1 refurbished from Emotiva for $1200. There is no need to bother with a HT bypass, this makes things easier for the rest of the family.
My system components:
ELECTRONICS
*Pre-amp Emotiva XMC-1 (processor DAC)
*Power amp Parasound 2125v2 front speakers (needed more power for Strata Mini's)
*Power amp Emotiva UPA-700 center and surround speakers
*Turntable Rega P6 w/ Ania phono cartridge and Rega MC FONO phono amp
*Bluesound Vault music server/streamer (digital out to XMC-1)
*4KDVD/SACD Sony UBP-800M2 4K
*Roku and Direct TV
SPEAKERS
*AV123 Strata Mini front left and right
*AV123 RSC200 center (Bigfoot)
*Klipsch Reference RS-35 surrounds
*Boston CR-6 back surround
*SVS SB-3000 subwoofer
I use BlueJean cables for all my interconnects and speaker cables also using a harmony universal remote control (bought a second one when Logitech discontinued them, keep BOTH of them updated).
IMHO unless you’re a HARDCORE audiophile a good processor (Emotiva, Marantz or Aracam) which has good 2 channel performance should work just fine.