I have used both in-ceiing and ear level surrounds in my space and the ear level surrounds are more immersive, but I am with those that feel that in-ceiling surrounds are better than no surrounds at all. It did add to the experience for me, but that's a personal opinion. Others will recommend no surrounds when they can not be placed properly.
I would disagree, though, on going 3.2 and adding a pair or two of ATMOS speakers. That
would give you the proper positioning for the ATMOS speakers, which should be overhead, but there is much more content in the surround channels than the ATMOS channels. That could depend, though, on the content you are watching. The Dolby upmixer also adds to the equation as that will feed some content to the ceiling speakers. Directional speakers, as you mentioned, will help, so if you decide on in-ceiling surrounds using speakers aimed at the main seating position will work better than down firing unless they are close by.
Some people post floor plans or photos and that can aid in members recommending placement options.
Lots of options for subwoofers. If you want to stick with Klipsch, I would recommend stepping up to the Reference Premier line with
a quick take here. Even the 10" RP-1000SW will go down to 20Hz although my recommendation would be the 12" RP-1200SW. These have slotted ports which make the cabinets a little smaller than typical ported subs. (Ported will perform better than sealed.) You mention kitchen and dining areas so if this is an open concept space then you will likely need more from the subwoofer than you anticipate as the volume of the space is a factor. Placing the sub closer to the seating position can help make up for that.
SVS and
Arendal have free returns on their speakers and both make capable subs that are well rated on this site. For something more cost effective, the
RSL Speedwoofer 12S reviewed well, and Monoprice's
Monolith subwoofers are price/performance leaders.