Speakers are going to have the GREATEST impact(plus seating possition in that small room) on the over all sound, and youshould definitely consider upgrading them! Upgrading equip with those speakers in that room won't get you that much improvement really. You should consider doing some very very small speakers in that room. The acoustics in such a room are going to be impossible to overcome for all practical purposes with any large monitor that play's low.
I can tell you right now, that you have boomy, peaky, dippy sound in that room....from any listening/speaker placement possitions! I would strongly consider one of the sealed box(non ported) acoustic suspension speakers on the market. Speakers such as Spenders, NHT super zero's/and One's, and even better, NHT 1.5's would be perfect for the money!!! They're sealed, play down to about 55hz (the small room will makethem play flatter down to the 40hz range realistically), have great clarity and detail, and pretty decent dynamics when set-up near a room boundary.
For $600 a a pair retail, you can not go wrong! (used about half price,or $300-400 range! Yes, they don't have as deep an immage as some, but so what! They are otherwise very high end sounding...only being bettered in detail by much more expensive speakers. (actually, there's some crossover upgrades available with these on the market for about $50 if you ever needed to tweek).
Your main concern is definitely the right speaker for that small room,and proper speaker/seating placement! I've gotten good results with speakers like these, in rooms that were 10.5'X 12.5'(8ft ceiling) in the past. Even small ported monitors were a real challenge to otherwise get sounding good in that small room, unless the speakers were way close together, out in the room too much...not practical.
Anyway, good luck....and you definitely should upgrade those speakers, carefully...