You have it basically correct. It is a total concept, where layout, speakers, room dimensions, interior design and construction and all part of an integrated total system approach.
It was not as costly as you think, as that space had to be built out anyway. It otherwise would have been bedrooms, and we have enough. As far as the room, the only new equipment was the AVP 7705, the four ceiling Atmos drivers and the LG 77" OLED. I had everything else for that room, and the equipment in the family room. The inwall system in the great room was a new build, but I had the TV, that AVP and the power amps. I, one of my grandsons, and a son in law, did the vast majority of the construction. Over 70 odd years I have collected a lot of legacy equipment, and I look after it. Most really good equipment does not go out of date, and works better than a lot of gear made last week.
The trick is to make it look and sound as if it cost an absolute fortune, when in fact it didn't. The whole cost was not out of the ordinary, and added I think, little to the actual construction costs of the home. But building a new home, which is our "nursing home prevention project", was going to be built anyway, as a hedge against residential care cost, or modifications later for adaptation to disabilities. The house is all on grade, and no steps anywhere in or out, and the ground floor is built to ADA specs, and the upstairs also, except the shower in that bathroom is not on grade and would not take a shower chair, like the one downstairs.
The biggest extravagance was the hydraulic elevator between the floors. That cost significantly more then this AV room. However, that was a good move, as both me and my wife have had issues from time and we have friends who could not now come upstairs.
So, over all we think we made the right decisions and choices and have no regrets. Careful planning is a gift that keeps giving.