Looks similar to my old config except my 1060 had 6gb. I'd say this is pretty balanced, if you upgrade the GPU you'll get bottlenecked by CPU, at least in my experience that was the case. I guess a smaller GPU upgrade (say, to a 1080 Ti) could work but I'm not sure it's worth it financially. I'd say keep it as is.
Buildapc
Do you think looking at this, a CPU with more cores and a bit of an upgrade to the GPU would work? Though the performance wouldn't go up significantly for the cost (including removing the old CPU/GPU). Cost-benefit doesn't seem to be huge here.
By HTPC, do you mean just playing videos? If so, you're probably fine as-is for most content.
gaming and videos using bazzite
Depending on exact codecs and such, you might get some occasional wierdness with some 4K movies, but I'd think under that, you'd be basically fine as an HTPC.
For gaming/emulation... I dunno, don't try and go beyond roughly PS2/360 era, ... probably that's doable, staying at or under that?
Put it together and benchmark it.
PC tech ages like milk
Just be grateful if you have a good, roomy, silent ATX case. That and maybe mouse + keyboard are the only parts I haven't had to refresh the last like 3 upgrade cycles