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Seems like the .223 would be a bit much for SD. Any round not dead on the intended target could end up in the neighbor's bedroom.
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No. Fragiable .223 ammo, like 50 gr soft points, penitrate very few walls of a house. The slugs fragmentate on the sheet rock and wood. In fact, 5.56 ammo penitrates less than 9mm JHPs!
The only downside is the blast from a 5.56. But then, full .357s have a fair amount of blast to, as does 12 guage shotguns.