8.5" 300BLK if you plan to suppress it. I see you're in MA though so you can go down to 7" and not lose a ton ballistically. The 7" guns are rough on suppressors.
7.5" 223 gives up a lot on ballistics.
From Quickload, napkin numbers:
300BLK: 125gr Hornady SST, 18.5gr Lil' Gun, 2.100" COAL
7" -- 98.65% burn, 1906fps (1367 J)
8.5" -- 99.57% burn, 2003fps (1510 J)
16" -- 100% burn, 2262fps (1925 J)
5.56mm: 77gr SMK, 24.4gr CFE223, 2.260" COAL
7.5" -- 83.34% burn, 2060fps (984 J)
10.3" -- 89.44% burn, 2313fps (1240 J)
16" -- 95% burn, 2621fps (1592 J)
You can see that an 8.5" 300BLK burns all of the powder, and gets you the same muzzle energy as a 16" 5.56mm loaded with 77gr bullets. The shorter 5.56 barrels don't burn enough of the powder.
If I switch to a 69gr SMK in 5.56mm, that is only 1542 J (2725 fps) out of a 16". If we run the classic M193 clone (26.5gr H335, 55gr FMJBT) we get 1606 J from a 16" (3114 fps) and only 972 J (2422 fps) from a 7.5" barrel, with only 86% of the powder being burnt.
So in short, on a pretty common supersonic load, a 7" 300BLK has nearly 40% more energy than most loads from a 7.5" 5.56mm, and that same 7" 300BLK retains about 70% of the energy that it's 16" counterpart has, where as a 7.5" 5.56mm only has about 60% of the energy that a 16" has.
Just to be complete, lets look at downrange numbers. At 300yd, here is the retained energy of the 125gr SST and 77gr SMK loads
125gr SST:
7" -- 429 J
8.5" -- 477 J
16" -- 631 J
77gr SMK:
7.5" -- 362 J
10.3" -- 475 J
16" -- 639 J
The 300BLK all loads retain about 32% of their energy at 300yd. The 5.56mm loads retain 36-40% (because of the different amount of powder burn in the different barrel lengths). At 300yd you can see how the 8.5" 300BLK matches a 10.3" 5.56mm very closely, and the 16" barrels match pretty well too.
So in closing, if you plan to keep it under 200yd or so, the 300BLK is the easy choice. Parts commonality with 5.56mm, availability of cheap coated bullets for plinking, complete powder burn, and a lot of oomph.
The 6.8SPC is another good choice for an SBR round that packs a punch at 200-400yd. I don't have the numbers in front of me, but IIRC, most common powders are burnt by 12.5", and that .277" projectile offers a better coefficient than the .308" in similar weights (110-130gr).
Or 10mm. The 10mm blowback guns are still tinkerer's toys at this point from what I understand, but KVP and Macon are making big strides towards getting them to be very reliable.