Hello and welcome to the forum.
To answer a few of your questions we need some more info. You say right now that you are not the type to spend lots of money on all of this audio video stuff right? Well stick around here too long and you will be. It is like a virus or an infection it gets in you and just festers.
Now seriously lets get down to business. For the sake of simplicity lets assume that the top of your room or drawing is North. Now I need to know are you thinking flat screen TV or a projector? Which wall do you want the TV/screen on. In a room that size you could go with 5.1 or 7.1 surround sound depending on how you want to set up the room and how you want to do seating ie. couch, recliners, theater seating etc.
For speakers you obviously want to run in wall rated speaker cables like THESE
to connect your speakers. If you do a projector you will need a ceiling mount and power and video cables (like HDMI) to the speaker location.
So for a simple example here goes.
You decide to put the TV on the North wall. You go with a 5.1 surround sound set up so your TV and front three speakers will be on the North wall and if you do a TV stand you need not do any wiring in wall as you can leave those wires exposed. You would then need a speaker plate like this CLICKIE
which would then run in wall to your left and right surround speakers mounted on your East and West walls. Here is a website and diagram for surround sound set up HERE
To give you a picture instead of words here is what I did in my media area.
Prior to wall mounting.
After wall mounting.
This is purely your choice on what you want to do. When I wall mounted I then fished the wires through the wall to the back of the speakers to keep the install clean.
This is a picture of my rear surrounds on the wall.
As you noted there is a wide range of equipment available and the sky is the limit budget wise. I have the Onkyo 507 and Klipsch Quintet III 5.1 speaker system. I purchased both on sale and together was roughly 800-900. Don't remember the exact total but was less than one K. I have a 13.5 X 13.5 room and that setup works very nicely. You will also find that as many people that are here that is how many opinions you will get on equipment.
As far as terminating the speaker wire (oh and I would go 14ga. min not 16ga) you leave about 8 to 10 inches of extra wire in a low voltage box (typically the orange boxes) and cover with a blank outlet cover till needed.
I know there is a lot of info out there and it can be a bit overwhelming but continue to ask questions, read, read, and read some more, oh and ask questions (wait I said that already) we all started and learned from somewhere so don't feel bad about your knowledge level.
Good luck and I hope I have helped you and not confused you further.