Your house reminds me a little of my own house. Maybe built around the same time. And my living room is a similar shape so I'll tell you when we have (and have had) in our LR. When we moved in, there were 2 sconces over the fireplace and 2 sconces on the opposite wall. The sconces on the wall opposite the FP made furniture arrangement difficult so we got rid of them. So now we have the 2 sconces over the FP, and on the opposite side, on either side of the sofa, we have lamps with 3-way switches. In another corner, I have another small lamp on a table, but that's just used kind of as a night light. I find that the 2 sconces and the 2 lamps provide enough light for our room.

And yes, I would try to coordinate to some extent, at least, with the dining room.

I like moravian star fixtures too but not sure if they'd work in the rooms you're showing. I have one in my back hall/mudroom :) It doesn't throw enough light to be a dining room fixture, IMO.

If you're looking for places to browse online, two of my favorites are Rejuvenation Hardware and Hubbardton Forge.

How about converting some of the lights with wall wash trim? It would reduce the overall brightness and direct the light to the walls, which would bathe the room with a nice, soft light. Can light covers are available for unused can lights; not the most beautiful things, but perhaps better than dark holes in the ceiling.

Here is a link that might be useful: wall wash trim

Basically ignore them ..... and draw the viewer's eye away from the ceiling area.
Draw the viewer's eye down and away from the ceiling with a single but much larger patterned rug in the living room.

Then continue to draw the viewer's eye down through the both rooms to the dining room -- and add a larger black iron chandelier over the table PLUS two taller matching buffet lamps on the buffet.

You could even try adding a tablecloth to the dining table in a single rich color -- similar to the strong visual weight of the sofa's warm rich color. Add a single large shiny bowl to the center of the table.

Just some thoughts .... hope you don't mind!

I'm just popping in to say that your barley-twist dining table is beautiful! Now, back to lighting suggestions....

It's funny when it's not my home, I find thing like this much less irritating - it may really bug you, but it doesn't look that bad to me. If it were my house and I didn't want the expense of filling them in, I might retrofit with smaller bulbed recessed fixtures which will look more current. Maybe some flat with some eyeballs toward the fireplace.

I also think (along the lines of Teacats post) that if you had a more intense wall color the ceiling would disappear even more and your eye would flow around the room, instead of being drawn to the "flaws = holes" in the monochromatic walls/ceiling. That, along with more lamps and colorful, larger rugs and a wonderful chandy in the dining room would add light and disappear the recessed, I think.

Thanks for all your thoughts! I do love my barley twist table, but it's rather small for diner parties so it will be moving to the guest room for use as a sewing table.

I'm definitely going to paint, but I'm hoping to deal with the lighting at the same time in order to do the ceiling and get all the mess over at once. Since the rooms are small, I'd like to keep an airy feel so my current inclination is BM Acadia in the LR and BM Kansas Grain in the DR (I have both those colors in other rooms of the house). But I haven't looked at swatches in these rooms yet, so that may change.

In the category of great minds think alike, I realized after looking at the photos that I really needed a large rug in front of the sofa to help define the space. I went with a 6x8 jute rug that does a nice job of anchoring my smaller Navajo rugs. It's a definite improvement -- I'd take a picture, but I have a cat sound asleep on my lap.

I hadn't heard of wall wash trim before - that could be a possibility. Of the 12 lights, the row of 4 that runs along the fireplace is on a separate switch from the other 8. What if I kept those 4 recessed with the light in the center two washing the mantle, and the other two pointed toward their respective corners. Then just get rid of the other 8 and center a light like this one in the remaining portion (and thanks for the Hubbardton Forge tip - I can spend a lot of $$$ there!): {{gwi:1889327}}From Living Room

But then what to put in the dining room? How big a chandelier for a 6 foot table? Maybe this: {{gwi:1889328}}From Living Room

Thanks again!

What about putting them on a dimmer, so you can control the brightness level when you do use them. I have 11 cans in my KIT. Not all of them are on the same switch, but all the KIT switches have a little toggle next to the switch that pushed up and down for brightness level. I have four eyeball type cans in my FR, and never use them unless we've lost something on the floor. Ha, ha. The overhead lights in this room make me feel like I'm in school. It doesn't invite a cozy feeling at all. These aren't on dimmers. If they were, perhaps I would like them better. We only use lamps in our FR.