Don't take this the wrong way, but this is a silly question. Of course you can set up a system in a 12 x 12 room. I have had a great sounding system in a 9 x 11 room that in some ways is better than the same system in my current 11 x 13 room with open closet (no doors) at the back of the room.
Part of the question relies on your hearing. Some people listen more critically and base new setups on something different. Your brain will always hear something different and that can be bad or good. At first ...
I don't use wall treatments. I could use them, but frankly, I have found positioning of speakers to have the biggest payoff.
I have Vandersteen 3A speakers and some M&K S-1B's and V-1B sub. The 3A's are in a permanent position, and the M&K's are setup for my listening position at the desk. This allows me to maximize the experience while I work during the day, and when I want to enjoy the 3A's, I just move the sats/sub out of the way. The 3A's are almost 3 feet from the back wall and 2 feet from the side, and slightly toed in. With some material, it's like living in a pair of headphones. They sound great. When it gets to hard rock, or congested material, that's when my room size shows weakness. But that is at high volumes. My wife's office is below mine, so that doesn't happen too often.
Where there is a will, there is a way. I'm just saying. Many have to work with what they have. If I wanted to optimize my room, I would just use small speakers and reduce the audio stacks for more space around everything. But the compromise for me is not to the point I would do that.