I'm about the same size as you 5'6, same inseam length, 170lb. I'd generally go for the size S.

1. It looks like your arms are fully locked out reaching the hoods. Your shoulders are raised close to your ears to compensate which may cause neck fatigue over a longer period of time.
2. Pain in your bottom could be from A) not being used to riding B) not having a saddle that fits you properly
3. It's generally more comfortable being on a smaller bike frame with a longer stem than being on a larger frame with a shorter stem. The shorter stem will make the bike handle more twitchy, you really start to feel it 80mm and lower.
4. The Giant size chart puts you on the larger side of S but not quite on the smaller side of M