I'd focus on furniture placement first as it's likely to be difficult in a long narrow room like that. Sketch out the room to scale and start plunking in standard furniture sizes. I think a small settee and two chairs flanking the fireplace might work.

To figure out the rest of it, you need to figure out what you like. Start looking at pictures and collecting them to be able to put your own personal stamp on the place.

Are you keeping the orange on the walls?

Is this going to be a living room with or without a TV?

No!!! The orange paint has GOT to go lol. Great idea, Holly! Im not a very creative person, so I thought I could fet some advice. The TV is another issue. I wanted to hang it above the fireplace, but it is an operable wood burning fireplace, and I have read that it is not such a good idea to hang it there.

First we'd have to know the dimensions of your furniture, how many pieces, colors etc. to give you some ideas. Is there a rug going in there? Can you take pictures of your furnishings? We need more information.

I am purchasing all new furnishingsfor the living room which is why I was asking for some advice. (all of my current furniture will be used in the family room). The room dimensions are 17x11 if that helps.

Maybe you aren't as creative as you would like to be, but you probably know what you like and what you don't like. So that's why you should get a bunch of magazines and on-line pictures to start seeing what speaks to you and what doesn't. We now know that you don't want orange. What other colors don't you want/what colors do you love? Do you have a Calico Corners or JoAnn's nearby? Try browsing the fabrics and figure out what and colors and patterns you like: stripes/plaids/polkadots/floral? This is where you can start, and then we can work from there.

Your room looks really lovely! Personally, I agree that figuring out possible/ideal furniture arrangements would be a good place to start. One option might be to put two identical sofas along each wall with a flat panel TV hung above one.

Since you are painting are you planning on painting the ceiling? Painting it a shade or two lighter than the walls will help rid you of that bowling alley look.
Next I'd do a scale floor plan.
I wouldn't count on doing drapes by the windows near the fireplace if you plan on using it, instead I'd look for two storage units for under those windows. I'd focus on making that side window appear bigger than it is.