[...] integrate the sound in to the TV as well [...]
Sadly, I believe that most people probably do use the built-in speakers on their television already.

More likely, you're looking at plugging in a handful of components to your receiver. All audio and video runs through a single HDMI cable per device. Then from there, one lone HDMI cable runs from the receiver to the television. Pretty straight forward. Not even today's consumers could possibly find that confusing... at least, not most of them.
The solution isn't to cram as much junk into a television as possible. The solution is to make it easier for companies to sell set-top boxes with actual functionality. Right now, the cable television providers are fighting tooth and nail to prevent just that. Bump the cable companies' locked down and mandatory boxes out of the equation and then organizations like Apple to compete to offer set-tops. Your interface would be there for streaming, for cable/satellite guides, for apps, etc. At that point, your video game consoles would probably even start to incorporate more functionality.