For sure, if you're setting up a proper home theater, the 1080p media will make a difference. For the family room, I agree the difference is minimal. At typical viewing distances, it's probably not even visible.

As for streaming, from what I understand, 720p is actually better than 1080p when streaming, because 1080p streams end up getting compressed to the point that they actually look worse than the 720p equivalent. Fuzziness from stretching the 720p signal is less visible than blockiness from 1080p compression. Blu-Ray obviously doesn't suffer from streaming limitations, though.