If you are putting your components along the 10.5' wall and sit opposite to it, then its should be fine. otherwise by the 16' wall you will be needing a very wide soundstage to experience it, and what typically happens is you tend to play louder (which is not the same as clearer )
This depends how you are going to be projecting (via roof/lighting conditions, background (since you say there is a lounge behind the screen).
You have to balance going for a big screen vs. grainy picture since a very big screen easily enhances the noise in the signal. If you happen to watch DVDs mostly on the screen (I dont recommend regular TV watching at this time), then you could go upto 65 inches.
If you still intend to watch regular cable/sat tv, then I say stick to 52 inches as max.