Where it says terrace, are those doors or windows? If they are doors, you'll have to consider traffic flow going in and out of that area. How many people usually sit in this space? Will you be having a tv? Is your terrace the focal point? Focal point can be a beautiful view, a fireplace, or a piece of wall art. Do you have a picture of this space? Pictures would help a lot to visualize the space and get a much better idea of how to decorate it. Thanks!

Your title says "bi level". Is there a change in floor level behind the sofa? You obviously have two separate areas to decorate, so maybe that is what you meant. I can give you my opinions, but you really should make a floor plan for these areas. Start in one corner and measure the length of a wall. Note how far a door is from that corner. Write down these measurements, with notations, such as Point A to B = east wall = 16' 3" and east wall closet door 8' 5" from point A. When you have measured all the walls and doors draw the walls on 1/4-inch graph paper (aka quadrille paper) which you can print from HERE. Your room is larger than an 8.5 x 11 page will hold, so print out more pages, then trim one edge and tape two or more pages together. Draw the floorplan so that 1 foot equals 4 squares on the paper. Each square will represent 3". Door placement doesn't have to be exact, but note which way the door swings, so it isn't blocked by furniture. Next, measure whatever furniture you intend to keep. How long and how deep is the piece? Most sofas are around 7' long by 3' deep, but there are variations. Take a tape measure with you when shopping. Furniture always looks small in an expansive showrooms. Make sure it will fit before you buy. After you have measured the furniture draw the outlines of each piece on another page of graph paper to the same 1' equals 4 sqares. Label each and cut it out. Now you can move the furniture about on the floorplan until you find the best position. Make sure you will have room to walk around the furniture. Try for a 42" pathway. I'm thinking you should leave a path on the left side of the TV area so it's easy to get to the bathroom from the fireplace area. I personally do not like sectionals, preferring a single sofa with 2 or more chairs that can be angled toward the TV or towards people for conversation. If, however, this room will primarily be for TV viewing a sectional could be better. Here is a Houzz ARTICLE on sectionals. The fireplace area is small and should be made cozy, IMO. A couple of chairs with ottoman and a table between. Perhaps a loveseat or divan under the windows. Maybe you like sitting in front of the fire, so how you place the furniture depends on how you will use the space. Once again, use the floor plan to see how furniture fits.

Hard to say without knowing what your section looks like. But try thinking outside the box. Sometimes angling furniture pieces works better that squaring everything up (like we're used to doing). It can look fresh and custom and make the space more usable. Or mount the tv to the side of the FP and have the sectional in that large area to the left of the fp, with a cozy sitting area (a couple of chairs and a table) in front of the fireplace.

Another voite to remove the fireplace and hearth. Will you keep a desk area? If so, I would move it to the wall left of sliding doors, put the sofa table on the wall where the desk is now and the sofa against it. A lamp or two on the sofa table. Sleeper sofas are super heavy and sometimes not that comfortable to sit or sleep on. For comfort, a left hand chaise would be nice for TV viewing. With the FP gone, the TV could go to the left a bit and could sit on a small media cabinet. Rig sized correctly and a small round coffee table. ETA: After looking at photos again, I see that is NOT a desk area. If FP is removed, you could use that chest on the "new" wall with the new/smaller TV on top or hung above.