Welcome aboard Ryan.
I just did a Coronado 25's systems last summer, here's one of my blog posts about it:
Journey in Patience: Electric Spaghetti
The owner was/is on a tight, small budget, if he can do it so can you. The C 25 is a good boat for basic sailing.
Basically you have the right idea, and good priorities.
The space under the aft dinette seat has all the room you need for two batteries.
We ripped out the original 4 switch panel and put in a lit LED panel with 6 switches and a 12 v plug.
There is a ground bus bar on the aft wall of that space, use it or put another one there.
Run your batteries neg to the bus bar, and all your neg 'appliances' (lights etc.) to that bar and all the positive wires to the out side of the switch.
Then run a wire from the battery to a 'Guest' type 1 -2 - off switch conveniently located where you won't kick it. Pick 1 or 2 for the battery and hook it to the in side
From the output side run a wire to the 'in' lug of the panel.
Run all your lights and such to the switch and that's it.
We (he) decided on
cabin lights one (galley)
cabin lights two (dinette)
Cabin lights fwd (v berth/head area)
Electronics (depth/fish finder)
In the process he pulled literally every piece of teak off the boat took it home and revarnished. Painted the forward bulkhead eggshell white and the frame of the galley the same (drawer face teak was refinished). All the original vinyl came out and got replaced - and the cabin ceiling plywood too, then re-covered.
Doing that cost maybe 150 bucks and made the boat look NEW, also gave him insight as to where and how to run the wires.
He put CFL's in for lights (LED was out of his budget) - one over the sink, one over the dinette and one that lit both the vberth and the head.
He also mounted a digital voltmeter right next to the electric panel.
For 110, he just runs an extension cord to his charger, no boat mounted systems at all.
He put a b/w lowrance depth/fish/chart unit on the cockpit bulkhead, stbd side, VHF is under the companion way, and stereo is in the cockpit locker, stbd side aft (it's water tight).
All the deck hardware came off, got the butyl tape treatment and back on with new bolts and washers, backing plates that show in the cabin were done with nicely routed teak squares.
Just fwiw, that 5hp will do in flat water, I'd go with at least a 8hp. It will fit.
I'm available by PM if you need.