My first reaction is that I would do it with the screen at the other end. I have a couple reasons for that. First, with the door on the screen wall you push everything to the right. That would bother me. Second, it's nice not to watch people come and go while you watch a movie - let them enter in the rear. Third, depending on how it's built/hung, your screen can block the small window.
I'd put the equipment in the small area you were saying would get a game table, so the lights are around the corner and not distracting me, but that would necessitate an RF or IR-repeater for remote control.
The 6" riser might be high enough, but it's all down to the screen size, position, and relative heights of the seats in each row. Given your budget, I would probably build the riser on 2x6 framing and adjust the screen position to make it work. The sticky threads in this subforum have a link to the riser-height calculator that can show you the pertinent measurements.
I would skip the fabric wall ideas at this point. They are a lot of work and money compared to a couple gallons of paint. But before you paint, go ahead and at least wire for surround. You won't want to fool with patching drywall or matching colors or anything else once you have the room up and running, so get all the infrastructure in place first.
Which brings us to sizing and placement... The following suggestion presumes that two rows is important to you; it sounds like it is, but you may have an easier time and better results with only one row. For your room, I'd start by putting the front row just behind the middle point of the room - maybe the front edge of the sofa lands at 7.5 feet back from the screen wall. That should put your eyes about 9 feet from the screen. It will leave about 5 or 6 feet behind the sofa for the riser and second row - on which I would move the seats as far forward as is comfortable for walking around. Note here that one of the reasons for staying away from the walls is even bass response - even if there are no surround loudspeakers, there are sound anomalies along the walls. Then I would measure about a 18-24 inches behind the heads of the front row and wire for surrounds. If there were to be a wall plate or wiring coming from the wall, I would put it about a foot to 18 inches from the ceiling. While you're running wires, consider laying wire for at least three subwoofer positions - you may never use them, but it will afford you a great deal of flexibility and room for growth.
Screen size and projector positioning is going to be tough for me to nail down in an "I would do it this way" sort of way, but let's give it a shot. I would want a big screen - in fact that's the way my planning has gone - build for the biggest screen you could want and then mask down if appropriate. If you want 16:9, I'd say around 120" diagonal would be good. That puts you about one screen width from the image, which is close. Some people will tell you this is too much. Maybe it is. But, "I should have gone bigger" is a common complaint in the "things I'd do differently" thread.
Handy links I use: http://www.silisoftware.com/tools/screen.php
Now the last part: where does the projector need to go. First, I would never recommend you hang the projector from anything but a proper mount. No one needs to accidentally drop their projector on their friends. Given your ceiling height, you'll need to find the lowest profile mount that fits your projector - which incidentally, I don't know what model it is. If you happen to have the common and affordable HD20, it will need around 14 feet of throw to get up to a 120" diagonal image. That would be great news, given the way I would do it, because it puts the projector slightly behind your second row. That way, even if someone tall stands up on the riser, they won't hit the projector with their head.
Then the last component, IMO, is acoustic treatments. The first step to good acoustics, I feel, is having speakers with good sensitivity (loud speakers) and controlled directivity. http://www.gedlee.com/downloads/directivity.pdf
Once they are in place it may be necessary to absorb some of the reflected sound energy from them (to keep the room from sounding to "live"). It is common to find that absorbing the first lateral reflection is beneficial, but that's not guaranteed. Almost definitely, a room this size with a subwoofer or two will benefit greatly from some low frequency absorption, in the form of bass traps - this may be another good use for the space in the smaller room area off to the side. Also the exposed areas of the front wall are generally good candidates for absorption. In all of these cases, a product like Owens Corning 703 is a potential good material to use (except for maybe the bass traps), in as thick an application as you can manage (in general- think 4 to 6 or even 8 inches thick on the walls, though 2 may be good in some places) This acoustic treatment portion of the "what would I do" response is problematic, but suffice it to say I would plan on some treatment beyond a sofa and carpet, but I wouldn't commit to fabric walls and the whole deal, given your budget and approach to this.
So doing it my way, I don't think I could do it for $200. Just carpet will put you over that, even buying a remnant and installing it yourself (I imagine). Wood for riser, a couple gallons of paint and a hundred or 200 feet of wiring (HDMI, speaker cable, subwoofer cable, various wall plates and connectors) will probably eat up your $200 budget all by themselves. This isn't the end-all of plans, but I think it's where I would start.