If your going for atmos, don’t put any bed layer speakers in the ceiling. Atmos works by using the height difference between the bed layer and height/top layer. I would recommend you do 5.x.4 over 7.x.2.(not sure what your AVR supports) Since there are basically 6 pairs of wires in the ceiling, use the ones that are closest to the 45° fore and aft of the LP. That’s easy to calculate. Measure the height from your ears to the ceiling, and install the top speakers at that length in front of and behind the LP.
I used RSL c34e’s and they’re 125 dollars each, but you can definitely use less, or more expensive ones.
And absolutely upgrade the sub. Look at HSU, Rythmik, SVS, and monolith to start.
Btw, what are the actual dimensions? HxWxL.