I don't know about the level of proficiency of those who will be using your system, but you should consider the number of component inputs you will have on the AV receiver as well.
While video upconversion isn't mandatory, it is a nice feature of the more expensive boxes. Yamaha, for the money, gives you more than just upconversion for your cash, so if you are looking to spend more, look for what else is in the box.
Saying "I am only looking to hookup..." and then listing a few products... Well, what about next year? How much other stuff may end up hooked up to this receiver? Is there a chance you may want to do other stuff (distributed audio?) with the receiver?
If all you need is basic audio switching then you can go without the upconversion. But, it's a wiring and user convenience to not have to switch inputs on the display to match the current source being fed to it.