Trey, another welcome. Since you're going to be sitting almost up against the back wall, there really isn't enough room for back surround speakers to develop a good effect. It's suggested that you mount your side surround QSs(4s should be enough)spread as widely as possible and also just a few inches from the back wall(if in fact you have to mount them on the ceiling rather than the back wall).
As to using front presence speakers(this usually isn't referred to as 7.1, although, of course, seven speakers are used), I've never personally heard them in use, but the reports I've seen haven't been all that enthusiastic. It would seem that the budget should at least cover other items first.
In that size room M22s with possibly an M2 center should be excellent. You ask which sub would "do the job", and although I'm using an EP500 with great results with my M22s in a room not too different in overall size from yours, if your budget is a little tight when you get to that point a lower-priced sub should still be adequate.
