I would use one of the window walls, not the HVAC wall for the screen.
The 1080/1085 certainly is a good choice. It's a bit more than the W1070, but unique with the lens design and quality. A real win there.
I would not pull the trim off the windows.
Know what I would do? I would black out whatever window you are covering, then I would paint that wall black. I would put up a couple of 2x4s to bump the screen forward, away from the window and hang the screen so it is 1.5" off the wall. I would then take some LED strip lights and mount them behind the screen's edges so I could turn them on when I wanted to. Add some really cool bias lighting to the setup while still delivering a comfortable setup.
The walls are a tough call IMO. I'm not about to say 'DO THIS!' for you. I think that covering either window has it's merits and drawbacks. It isn't at all a unique situation, and the last time I setup my theater space from scratch I did it in a situation similar to your shorter throw option opposite of the stairs. I put in a nice comfortable wide couch. A 'theater' couch with a loveseat and two additional seats on the ends with cup holders and dividers between the outer seating. It was about a 13' wide couch, and gave everyone a great view of a 106" screen I was sitting about 11' (eyes to screen) from. In my new home, I'm likely to set it up differently, but will have two rows and likely a 150"+ screen size.
Yet, I've done setups for others where I've put the screen under the soffit and it has worked out equally well. You lose a bit on size, but can move the seating just a bit closer, and you get the back area to work in or put a second row of seating into for guests.
Either way, I would keep the windows very much intact and I would just cover them completely with a blackout option. The window behind the screen getting something that isn't removable (even basic cardboard works fine) and the other window getting nice blackout shades of some form.
Should be a really fun setup no matter what you decide.
On the note of audio, you certainly should expect some audio bleed from the bass, but on the ground floor vs. a main or higher floor, it has a long way to go before you are disturbing someone's sleep.