First, see if you can move your furniture away from the walls. The sofas are different size, but I think furniture looks better if it isn't placed around the perimeter of the room. Make a cozy seating area around the fireplace where you could place a coffee table and a pretty rug. Then take down the mirror and place a few decorative objects of differing heights about the mantle. Love the plant! Plants and floor lamps are the type of items that can sit between the furniture and the wall.

It doesn't at all look like there is enough room to 'float' the furniture. It's an attractive room to work with. Do you have inspiration pics? I didn't catch initially that this is a sunken living room? What is on the other side?

Editing....Which photo is closer to the actual carpet color? From my screen the color of the carpet and couches seem to fight a bit. Are you up for replacing it, or adding an area rug on top?

Calling April! April had or has a beautiful yellow room.

Can you move the loveseat to the opposite side of the sofa and the chair to the opposite side of the fireplace?

So would you consider layering a rug? What size is this part of the room?

Is this the only living space? If not can we see the furniture in the other rooms? Can we see a picture of the area with the wood floors?

You also need a large rug with the colors of the sofas and carpet (which on my screen look yellow/sofa and a grayish pink/carpet) so that it can help "marry" such disparate pieces and colors.

Blair, I agree with your idea of removing the floating shelves and switching out tables. Before you do the latter, figure out what you need/want for lighting -- it's possible that you could use/might want a floor lamp in the room. There are also a lot of small bits and pieces on the mantel and on the small table in the corner which could possibly use re-homing...

Please show more of the space. Er612 has a good first plan. You are cramming in too much into a small space that needs that open walkway from steps...

In this situation take out table from corner of room (near shelves) and put a standing lamp there.

Too many things crammed in corner, the right side is heavy.

Try taking out that little table. Put candle sticks on mantle. Mirror where two paintings are. Pillows on sofas. Leather or faux leather needs fabric on it.

I would keep the floating shelves maybe paint them white change the mirror...maybe something tall and a little narrow for it's too small and a nice blue rug.

I'd continue the wood flooring into that space and add an area rug.

My cues on color came from the mosaic. It looks like it has pink and sage? I like those colors.

If this is way beyond budget just eliminate the yellow love seat and buy a rug and two patterned chairs with a tic of yellow. Most of these rugs are on Overstock.

If you are having a hard time sometimes it's easier to bring it down to the bones and then fill. *Note I brought in the same flooring as the adjoining room .