This is helpful, if only for the glimpse into your thought process.
I can see a case for building a small, sound-isolated room with proper internal acoustic treatment for small group use. You still need enough width to walk around the seats, even if the rear/surround speakers are all mounted in-wall. And you still need enough depth for your screen size, so front seats don't see pixels and back seats aren't against walls.
Your seating area may be the size of a car, but you really don't want to walls that close.