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I'll answer your questions.
never ever convert a source (hdmi ->cat)if you are concerned with maintaining quality.
hdmi cables are fine up to 30 feet, any longer you need an active hdmi cable. forget the whole deal if it needs to go 50+ feet
netflix streams to you receiver not your television. that 4k netflix signal will not be impacted by an hdmi cable connectioing the receiver to the tv.
7.1 is neat and all but you are asking for a nightmare install for very very VERY little in return. There are very few movies that take advantage of 7.1 and even then it's a very brief. I would not waste my resources on 7.1 I would spend extra on dynamite sonically matched front speakers, left right and center, then some matched lower-priced rears.
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