No, it won't hurt the sound having long runs. Just make sure you have a thick enough wire for the run. As far as your builder not letting you run wire it is total bs. Speaker wire is low voltage so there is absolutely no danger of fire from an electrical code standpoint. He's just trying to bully you into paying him to do it.
As far as acoustically isolating your space it is quite involved and requires a bit of an investment. You can go to the Home Theater and Room Construction part of this forum if you want some ideas on how to prevent sound transmission.
Television: Mitsubishi WD65737 DLP
Processor: Emotiva UMC-200
Amps: Carver AV 806x/Behringer EP4000
Mains: DCM TimeFrame 600 Center: AT 453C
Surrounds: AT 251.1 Sub: Danley DTS-10
Blu Ray: Panasonic DMP-BD655