I live in Manhattan and have a similar space. I tried about everything out there (size wise) from very high end large tower speakers to small and large sized bookshelf speakers with subwoofers.
I gave up on the subwoofer. no matter what you can't be a good neighbor. the large tower speakers were as bad or even worse than the subwoofer for annoying the neighbors.
large bookshelf speakers have not been an issue though. I had just a 2.0 system for awhile but recently bought the matching center channel and went to a receiver instead of an integrated amp.
I'm quite happy with my pioneer s1222k. it replaced a peachtree nova ($1300)
i think for movies it's a great improvement and to my ears the music sounds pretty much the same, if not better, due to, probably, the room calibration of the receiver.
to my ears, adding the center channel was definitely worth it for movies and shows. dialogue sounds better and is easier to understand, and the overall movie experience is improved.
the speakers I use are Monitor Audio RX2 silver on b&w stands filled with sand ($100) and the matching center channel. i paid about $1000 for all 3 speakers. the receiver was $500 from newegg