Ideally you should piece the system together gradually, with higher end stuff. You will appreciate each piece much more, and come out with a superior sounding system. Speakers are the longest term relationship you invest in with a system, so it makes sense to spend the majority of your money there. Receivers last 3-5 years (tech changes, and failure), subwoofers are always improved upon, but speakers are generally a long time fixture.
My suggestion is to buy a nice receiver, preferably one of last years models, that you can get a nice discount on. Make sure it has functionality you desire (networking/AirPlay?). The Denon you mentioned seems like a good choice.
Then add the best speakers you can afford, with wife approving Maybe these Martin Logan Motion 10?
, the Motion 12 are on sale at Best Buy Magnolia locations for $250ea. If you have the room, using these as all 5 of the speakers would be ideal.
Alternatively, this is the best pair of speakers I've seen under $1k in a long time. Everyone will argue for their own favorites (I own Paradigm, HSU, and Emotiva); but I can certainly reccomend Wharfdale's especially at $1200off retail delivered. WHARFEDALE - EVO2-40
or the smaller, but still Tower 30's for a little less:WHARFEDALE - EVO2-30
For a sub in that size room, you need SERIOUS output, or it's not worth doing. I'd plan on spending $800 and getting one of the best subwoofers on the market, and Epik Empire
or it's little brother Epik Legend
The parallel 15" subs will do you well in a space as big as you have.