I kind of like the wood paneling. I'm not a master of acoustics, someone else can comment. From a general basic advice perspective:
I would probably keep the wood paneling just on the back wall to maintain character.
Spend some time (which it looks like you're doing) planning out where your projector will be mounted, seating arrangement, speakers, and possible stage - before you begin.
Then realize your plans will probably change as you start working and your budget will probably get exceeded.
I agree that is a good room size. Obviously use the 16ft for the projector throw and 13ft for the screen. If you don't go acoustically transparent screen, build an area around the screen to be acoustically transparent so you can hide your speakers. Get rid of the ceiling fan immediately (xD). If you're thinking about holding sound, you will probably have to add staggered studs or double studded walls (at the minimum).
The room should be completely light controlled. I leave that idea up to you. No light should escape or enter. Front wall should be completely black.
When you get to wiring, be sure to double check you have everything. You should run conduit through the studs to make it easier in the future.
It's hard to "get everything done" at once, so concentrate on one step at a time and make it the best possible within your budget, carpentry skills, and time constraints (if any). I only look one step ahead (i.e. doorway opening will be this large, I need to accommodate that). Many of our theaters here (simple or complex) have taken years to complete. In some cases it's budget, others it's time constraint, and I think what will happen to you (as it did to me) - busy researching constantly on AVS for ideas.
Welcome to the forum - good to see your first post is in the dedicated theater design and construction - one of the better sub forums on here, in my opinion!