Okay, I've thought of this before as in, if a burglar stole everything and I had to start over what would I do. I'd do one of the two things you mention above. A good basic Revel-esque system sized for the room or go the active route. Going active for residential audio you have few choices, but that is getting better. I'd think digital crossovers and room DSP are good. So if not a Revel passive, maybe Kii or Dutch&Dutch if that fit the budget. I always tell people to start with speakers and work around those once you've made a choice.
So lets say we stick with passive speakers, but good ones. I'd go with some nice Hypex based amps. Get a good DAC, or streamer, possibly an RME. Feed it over a small computer or direct off wifi if a streamer and be done with it.
Now is that good advice? I'm sure I'd be plenty happy and satisfied with that approach..............now. If I were someone just starting out, I don't know if that is good advice or not. I've seen people who bought well, bought once and lived very happily with their gear for 20 or 30 years. The other approach, the one I've lived is that you don't know what you want at first. Even if I ended up with exactly what someone with knowledge suggested to me I don't know if I'd have the confidence to be satisfied with it as much.
What I did was get something better than average. Learned what was important to me and what isn't. Moved onto to better gear a few times. Refined what I was looking for moving onto to even better gear. Made some foolish choices and learned. Made some good ones by accident and learned. Had to adapt as we went from LP and tape to CD to just digital files. All of it was interesting and fun. I know what I do and don't like about a system, and with new tech and real improvements even that has evolved a bit. So yes now if starting over that advice I'd give is really what I'd do and be fine with it. But if I'm telling someone else, without having lived it out, they'd have a good system for music, but would they miss out on the fun and experience of getting there. If I climb a mountain and take in the vista below, is it the same experience as if you get dropped off on the summit by a helicopter and take in the same vista?
Leaning back the other way just a bit, One difference between the time I lived and now, in the early days, all parts of the chain had real genuine performance differences that mattered. Now speakers may be the only part that still matters in terms of real audible performance. That means if you do much more than get good advice and choose according to it, there is little to gain other than a fantasy and wasted effort. So the experience I lived is not actually available anymore. Perhaps why better quality audio has become more niche and expensive along with all the usual reasons.
So my advice that is useful ends up being, get whatever features and UI you prefer and buy good speakers.
Now beyond that if someone is smitten by the music/audiophile bug, I'd suggest go ahead and make the change to multi-channel. Don't go very far in gilding the stereo lily so much. It is mostly a waste of resources or if not a waste small returns. Stereo is just a different experience than mono, and much more like live even with all of its deficiencies. In one way MCH is not all that good for the improvement. I'd say if done well maybe 30% subjectively better than good stereo. Yet you need 2.5 or 3 times the gear. But this is a time when everything else is so good in basic performance you'll really struggle to get 30% better with stereo. Actually you'll only do it if your speakers aren't too hot. So if you want to really get the best MCH isn't a bad way to improve.
* OTOH, the pitiful performance of AVR amps and other cheap amps means you still have to put a little more into amps to get good performance. It really need not be that way, but it is seeing Amir's test results.
