Love the JVC projectors. The only other projector I know of with auto-zoom in the approximate price range is the Panasonic, but the JVC would outperform it handily in terms of black level.
When you say totally light controlled, do you mean that the walls and ceiling are painted a very dark color? That will also have a pretty drastic effect on your black levels / contrast.
Your seating distance and proposed screen size should be fine for that projector. I am seated about the same distance from a 144" Stewart StudioTek 130, so you could go larger if you want. However, I would be concerned about the screen gain if you do. I have no idea what gain spandex has, and I know that most AT screens are going to hover around 1.0 effective gain. For that reason, sticking to your proposed 120" size might be the safest idea, especially if you are going the zoom route where brightness is at a premium.
If you are going to eventually add an anamorphic lens, putting your throw at about 14 - 16 ft for that size screen and room should minimize pincushion.