I would leave the walls white. Since you are on a budget my advice would be to edit your furnishings down and rearranging the stuff you have. If this was my space: I would move the dining room table out from the wall. It looks like you have enough space to float it in the dining room. You aren't using the woodstove at the moment right. Does the high chair fit into the space between the woodstove and wall? If so I would store the chair there. Put a pretty washable tablecloth on the table. Ebay has some great/cheap vintage ones. Then add a mason jar or large jar full of wildflowers on the table. Could you move the cabinet with the bread drawer out of the kitchen and put it in between the door and window where the dining table was? Would there be enough space? If so I would then ask dh to help me put up some basic white shelves in that space for storage. Move the garbage can back and that white rectangle (is that a fridge?) underneath. Reorganizing and decluttering the kitchen would really open that space up making it more functional. You could store the pantry type items in the cabinets and move your dishes out where they could be seen on the shelves for a clean modern country look. Where does that door lead in the living room? Is there anyplace you could move that wonderful china cabinet. I would move it to another room or upstair's and use it in a new way. Storing linen in a hallway or craft/office supplies in a rooom, etc. Store the china in the cabinet in the hutch that used to be in the kitchen that is now in the dining room. I think the idea of using quilts is a brillant one and I would put it in the area where the china cabinet was. Take the frames off the walls and repurpose the small bookcase and table in the middle of the room into other rooms. Again not sure of proportions but I would move the couch where the love seat is and the love seat where the recliner is and the recliner by the window where the couch was. Adding lots of large basics for toys and clutter. You have a lovely home. Can't wait to see what you do.

I know you said you did not want to switch rooms; but since you like the look of the sink in the bay (the outside views are awesome), it may be worth exploring. If your DH is like mine, change is hard, but he comes around eventually. Perhaps posting another thread that asks people to weigh in on the two kitchen locations with a mock layout for each might get DH to consider the possibility if he can read what others have to say concerning the positives and negatives of each kitchen location. Many people are remodeling to get a larger kitchen space by eliminating two sit-down eating spaces in their homes. Thus, If you switch the rooms, I do not think you would have to “stage” a formal dining room if the time comes to sell. The larger, well designed kitchen would be a major selling point. Keeping the kitchen in its current location does not gain you a whole lot more space for the kitchen because of the traffic patterns; moving the kitchen to the dining area gains you much more kitchen space. You gain the space for family friendly island seating, and the kitchen does not have to be in a location that “fights” with the traffic patterns of your home. The generous dining space combined with the larger kitchen space would be awesome to entertain in. One negative would be carrying groceries a tad farther but not a whole lot more. ;

Even with a very narrow table of 36", you need 24" on either side to pull out chairs. That alone is 7', which only leaves you 6' for a sofa and coffee table. Your best bet is to lay out measurements of the sofa with blue tape and see what you have left for space. Is there a reason you need to fit both areas into one space?

@3onthetree I have added full floor plans to original post -Front door is the one near the stairs. -Stairs are actually 17, if you count the 2nd floor as a step :) -9ft ceilings. -2nd story is kid zone: 4 kids bedrooms, 1 Jack & Jill bath and a playarea -Wedge for stairs measures 25" to its lowest point on the wall. (Picture below) -I'd love to put the stairs somewhere else, but can't figure where. -No basement, on slab. -I'd love to utilize that twin closet area, walls can be taken down, ceilings in both closets have the same height as the main floor.