Some suggestion & answers.
Hi Shintsu,
#1. Positioning a pair of surround speakers 3 feet higher than your head at the back of the room is perfect in your room situation.
#2. Your TV and CD player have a digital Optical OUTPUT, not input.
#3. HDMI connection is the best choice, digital Coaxial is the second best choice and digital Optical is also second best choice, right behind Coaxial.
#4. The Denon AVR-4802 for only $300 is a GREAT deal, an AMAZING value, even if it doesn't have HDMI connections. I will certainly go for it.
#5. With this Denon A/V Receiver, you can still add external amps in the future or now (but you don't need to in your small room, the 4802 is a power house of a receiver), because the 4802 has preouts for all it's channels.
* So, with the Denon AVR-4802, you can use the digital Coaxial or Optical for your audio connections and get excellent surround sound, with the Dolby Digital at 640kbs, and DTS at 1,500kbs from a blu-ray player.
-> For your room situation, it is more than you really need, but for only $300, the Denon AVR-4802 is a no-brainer. I highly recommend that you buy it, before it's gone. And this is if you don't mind living without HDMI connections, and use the Component connections instead. In your case, this doesn't seem to be a concern.
-> And just add a center speaker for a full 5.1-channel surround system.
Cheers,
Bob