Here's a thought,
back in the 1970s, I spent some time in Germany. At that time, the W. German army using the 7.62x51mm NATO as their rifle round, also had "training ammunition". This was a brass case head, with a plastic case & bullet molded in. When fired, the plastic bullet tore off the case and went downrange at very high speed. Being very light (something like 15 grains or so) the bullet lost speed very fast, and was only dangerous at very short range (under 25yds).
These training rounds did not need any modifications to the rifle to function. They didn't need a blank adapter or anything like that.
I do not know if they continued this concept with the 5.56mm, but if they did, and if you can legally get some, you could use it for backyard shooting.
As I recall, the report was different from regular ammo, but still pretty loud.
Also, I understand it was a pain in the butt to get the plastic out of the barrel after firing a bunch of these rounds. There's no free lunch.
As far as I know, no one commercially loads subsonic (low power) .223 ammo.
Two other possible options are 1) a chamber insert to allow firing .22RF (which is a one shot at a time thing), or 2) full .22LR conversion kit for the AR ($$ and possible legal issues getting one, where you are).
Best of luck to you.