Need sound system advice

[Rolling Dice]

Hi, I need advice for my setup as I don't know much about sound systems and audio in general I'll try to be as concise as possible.

4K TV: OLED 65" LG C1
4K player : Panasonic UB820

I live in an apartment (so neighbors), my "home theater" is a 4 meters/13ft long, 3 meters/10ft wide room (so pretty small).

A first I was considering getting a soundbar because it's hassle free, it saves a lot of space and I assume it's more neighbor friendly, but apparently you can get a proper sound system for even less money so I'm open to anything.

Important: I have a lot of CDs and my current Hi-Fi system is too old. Audio quality was never great anyway so I need to replace that as well.

Ideally, something I can use for both movies and music, preferably wired, with bluetooth support if I need to quickly listen to something from my smartphone or anything else wirelessly, not too loud/powerful as I live in an apartment, would be perfect. My TV and my player are pretty decent so I need something which can make the most of it without being too expensive.

Also, constantly reaching for the remote every time sound FX, background music etc. get VERY loud, making the dialog nearly inaudible when the action stops, is a problem I DON'T need. Watching Inception on my dad's setup still has me waking up screaming in the middle of the night, so I need something that can handle that because it gets old real fast. In fact, dialog clarity is paramount for me.

I'm not sure whether a soundbar or a proper speaker setup would be a better option in my case, so advice would be greatly appreciated!