Room size doesn't matter nearly as much as listening distance does. If it did matter, we would be unable to hear sound outdoors.
I disagree that 3.1 is clearly superior to 2.1 in this instance. I think you would need to try to be sure.
You do have a lot of option in this price range. You'll loose maybe $500 to your AVR. If you went with a single, solid SVS or Hsu (or any of several others) sub that would be around $800; so maybe $1700 for front speakers (assuming you don't need an amp for your choice).
There's an awful lot in that price range that's recommendable. Whether you go 2 or 3 fronts will make a signifigant impact though ($850/ea vs $630/ea speakers).
I lack personal experience, but Ascend comes up a lot in this range. At two-speakers there are some Salks. Most of the major brands (Pardigm, B&W, Focal, etc) have speakers in this range as well.