Let me start by saying I know / understand little about hooking up computers to home cinema. I only get 6.5mb download speeds, so there is little or no point in trying to stream films or music come to that, for me. I am an old school traditionalist, I have a tv that receives conventional tv signals via an antenna and a blu-ray player to watch films.
HDMI definitely better than optical, though you may or may not actually notice a difference, perhaps less so from pc(?)
A HDMI connection from your tv to any of your HDMI inputs on your receiver should work just fine. The beauty with ARC is it will pass a signal in both directions whereas you need two cables (input and output) otherwise. You just need to select whichever HDMI source you have connected to in order to hear the audio (no different to connecting any other piece of equipment, other than if it were a dvd / bluray player the receiver would then transfer the video, even audio too to the tv through the output HDMI).
You may have to turn the tv speaker off manually to stop it playing the soundtrack along with the HT system. My set up (with ARC) disables the tv speaker automatically as soon as my receiver is switched on – I don’t know if yours will do the same.
That’s a shame re damaging a speaker! I wasn’t really suggesting you go out and get a 440, just wanted to say I don’t necessarily agree with other people’s views about Klipsch. Bigger doesn't always mean better, but improvements should generally be expected. Small speakers will go just as loud, but not in big rooms.
I also found a review on the Quintets - https://www.digitaltrends.com/home-theater/klipsch-quintet-review/
From what the reviewer says, you should definitely be able to achieve a pretty decent sound from the set-up, especially if you have an additional sub. I can’t comment about the SW-350 as I don’t know it, indeed I don’t know much about any subs as I don’t use a sub myself. My front speakers already have 12-inch bass drivers and I am quite happy with the level of bass I get. To be honest, I have always found it difficult to get a sub to sound right (well-integrated) to my ears. I have come across a modest B&W VM1 / AS1 5.1 surround system that gave rather impressive results though.
I would dig out the mic and do some more calibration(s). My Denon allows me to save settings to a USB stick, which can then be re-loaded. I have a number of sticks (can only load one version of settings per stick), it’s very easy to then compare different calibration settings (they don’t always come out the same) and decide which is best. A bit of manual tweaking is usually required after calibration, but when you get the system as you want it, it’s great to have a copy in case something goes wrong (saves getting the mic out and doing it all again). Not sure if you can do this with the Yamaha (it was also possible with the previous Marantz). If not, I would write all the settings down after each calibration.
If you had a speaker diaphragm not working you should notice that when putting your ear close to it. I am sure they are all fine.
As MAN also said, speaker positioning is rather critical. On the other hand, ideal may not always be possible, depending on situation. That previous link may also give a few tips in this area. My centre speaker tweeter, by the way, is 60cm (ca. 2ft) off the floor, my main speaker tweeters 90cm (3ft) – all because of the tv, which is also at eye / ear level. No way around this, it’s no different to yours, and it’s fine.
Sounds like you are making progress. I am sure it’s tempting to perhaps spend money on other items but, from what I have seen / heard, it sounds to me like you are not yet getting the best out of what you already have. Save your money for now, you can always spend it later if / when any definite problems with equipment should come to light.
BTW, it’s not necessarily an issue about liking or hating any particular make, as far as I am concerned. I found with audio, and am finding also with HT, the combination of equipment (how something works with something else), can make quite a big difference a hence affect opinions – just because something doesn’t work well with a certain piece of equipment it doesn’t mean it can’t work very well with something else. It’s about matching……. you wouldn’t tow a caravan with a Ferrari!
