1) Your Bose V25 is probably converting the LPCM 2.0 signal to 5 channels based on some setting you have on the Bose. If you set your Bose to "stereo" or "direct audio" or something like that I bet it wouldn't try to use the rear speakers for that kind of signal.

2) I would avoid having your Bose receiver to the upscaling to 1080p because the video processors in receivers like that are usually very basic. I would tell your PS3 to output 1080p, and let everything else output at its native resolution. Your Vizio TV should upscale anything lower rez than 1080p up to its native rez more effectively than what the Bose will do.