If you want to provide other seating in your living room, you're going to need a different couch. Is there another room it could go in--for instance, if you have a kid's room, he or she would probably love to have it be their bed/reading nook/play area. Also, ask yourself where people congregate in your house when you're entertaining. If everybody always goes in the kitchen anyway, why spend a lot on living room seating?

If you buy a smaller couch, then bring a couple of dining room chairs into the living room when people want to sit there. Not every occasion has to be filled with comfy, sink-into-it furniture, and dining chairs are really easy to move around. Don't have a dining room? Great. Buy a couple of dining chairs in good structural shape at the thrift store, paint the frames, re-cover the seats, and have them stay in the living room for extra chairs. They don't take up a lot of visual or physical space.

You are at an exciting point, Judy! You now have the chance to exercise your creativity in a big way. Here's the good news about moving into a small space: there's lots of
decorating help out there. Try these blogs/sites as starting points:

http://www.mydomaine.com/small-space-decorating-mistakes  

https://www.bhg.com/decorating/small-spaces/  

https://www.southernliving.com/home/decor/small-space-decorating-ideas

If you are talking about the gray piece there is no way that seats 4 people since the person right now takes up 1/2 the sofa. It is too large for a small space but really with no sizes of the space or that piece how the heck do we know.

You couns fit that piece of furniture and not much else in that room. How often do you actually have people over? If it’s half a dozen times a year or less, bring the old sofa and work around it when people are over. If you have people over 3-4 times a month, then set up for entertaining. A lot of people set up their homes “for entertaining” when it would make more sense to set it up to live the way you live 360 days a year.

Getting a floor plan and a measurement of the couch will help. I think it could fit on the wall with the small window. You might have to get rid of the orange couch and get one or two small chairs instead.

So everybody knows: Judy said earlier that the photos of the couch were from the manufacturer's website. I don't think that orange couch is hers, I think it's something else the manufacturer makes.