2 Channel system sounds weak and lackluster

Sounds like room acoustics to me. A room of that size can be a great audio room. Your equipment definitely sounds up to the task. 

Before doing anything permanent. Start by simulating room treatments. Get all the couch cushions and pile up behind the speakers. Find a way to lay temporary carpets... if necessary, pull out multiple layers of towels and all the bedding and cover the floor. You want to deaden behind the speakers, and reflection points on the sidewalls and the floors. 

I just finished helping a friend turn an extra room about the size of yours into and audio room. It sounds fantastic. We started with couch cushions, pillows and carpets and then over the last year he purchased new and used ASC tube traps and panels. The room sounds fantastic with Wilson Watt Puppies. You can turn it up loud and  it sounds great, dynamic with deep punchy bass. 

Ultimately we chose the narrow wall to place the speakers. 

+1 @rick_n   

The reflections are going to play havoc with the sound.  I agree that before you start swapping out equipment, work on the seating position and try some makeshift acoustic treatments just to see where that takes the sound.  Throw down a rug(s) in front of the speakers.  Got a couple of book cases, put them in on the side walls where the 1st reflection point is.  Put a few pillows in the corners.  Extra sofa, put it on the back wall.  You get the idea.

And just double check the speakers are hooked up correctly and not out of phase.  The picture of the back of the amp shows the speaker connections are mirror imaged left to right.  (The "+" connections are to the outside.)

Lastly, you mentioned moving the speakers around.  Have you also played with the toe-in as well?

...just my 2 cents...   

- Jeff

Just speculating:  I believe that amp is an older Class D design?   Wondering if that could be a bottleneck.  Of course with older gear there is always the possibility of deterioration over time.  

If so there are newer options that are very cost effective and low risk to try.  

Adding a sub even in a small room can also often help add ooomph.

Hi @boxboy83 ,  Is the sound equally dull with vinyl vs digital?  I always found the Directstream dull sounding.  If with everything, I would perhaps try a more enlightened amplifier.  I have not heard this AR amp.   I am not surprised the Wharfedale speakers were worse.  If you were to look at a new amp, what would be your price range, and new or used?

Depending on the age, I would check the DC offset on the amp.   It is easy.  Here is the procedure:

To check DC offset on an amplifier, connect a multimeter to the speaker terminals, with the black lead to the negative and the red lead to the positive. Ensure the amplifier is powered on and not muted, and the volume is set to a low level. A reading of 0 mV or close to it indicates a properly working amplifier. 

Note:  I have an old 90’s ADCOM GFA-585LE that was not sounding right.  My DC offset was .9 volts, ie. almost 1 volt.  Way, way too high.  After a repair, it sounded great again. 

Well that's a bummer.  Small and medium sized rooms always have a place where the bass gets cancelled out and causes a big dip in LF volume.  Try moving you seating position and see if that brings up the bass you're hearing.

The untreated room is a real problem.  Since the room is almost the most important component in the system I would work on that, even if it's just baby steps, before swapping out equipment.  Too many people change all kinds of equipment and never deal with the room and end up frustrated.

The untreated room is sending full force, full range sound reflections off all the surfaces in the room competing with the direct sound from your mains.  This will be mostly mid range and HF signals that will arrive at your listening position all out of time (phase).  Good luck and cheers.