There are too many questions and proposed descriptions to address it all, so here's some basic advice:
Yes, remove both half-walls so the room is a plain rectangle. Put the speakers at the balcony end of the room so you get to look out the window while you listen. Don't worry about the terrible frequency response since you don't have any bass traps and other treatment yet. There's no need to replace the floor material, just get some thick carpet if the sound is too live. Then add as much treatment as you can manage, and then you can assess the sound quality and measurements again.
Wait your balcony is 136mm? Put your cat out there!
jk you probably meant 1360mm which yields 53.54in or 4.46ft or 1.36m.
As a side note it's funny how I can look at someone's room and instantly have a suggestion while on my current one I'm struggling. Anyway..
I'd say put the balcony behind you, stuff it with pink fluffy insulation and place your speakers at an equilateral triangle from your 38%-from-front-wall listening position. I suggest this because your balcony, complete with it's Modern entryway, is noisy and uninsulated - isn't that what fiberglass is supposed to fix? Plus you don't want those heaters melting up your audio drive mid mixdown. I mean I wouldn't.
I think it's pretty cool that you can delete walls where you're from. Over here we have to destroy them with hammers. Ah, technology.
Keep your floor reflective, treat your corners and first reflection points and kiss your problems goodbye.