Whenever I've had to re-set my Onkyo receiver I am often puzzled why Zone 2 doesn't seem to be working... but then I remember to raise the output level (volume) on Zone 2. My Zone 2 speakers have their own volume controls so I need the Onkyo to be putting out a Zone 2 signal at close to full (~75%?) volume. Maybe that will work for you?
And, yes, you need to make a choice... either those 2 amps serve the main listening room OR as Zone 2 amps. It's one or the other.
Finally, the 709 needs an analog signal for Zone 2. You need to run a RCA cable (in addition to HDMI) from your Cable Box, Blueray, etc. to the Receiver in order to have those inputs available to be heard in Zone 2.
Hope this helps.