I'd say from the stairwell north is pretty useless for furniture. And what does the furniture look like? We don't know what we're arranging here without pix of the furnishings. Are you buying all new? What style are the windows and stairs and fireplace? Apartment or loft sized pieces may serve you well in such close quarters. What do you want to do here? Watch TV, play cards, read, have drinks, entertain?

Do you plan to have a television?

I do not have any furniture for this room, currently I have two dining room chairs in there so it's not just an empty room- so anything you can imagine in a living room is fair game. I am neutral about having a television in this room. I can always mount one above the fireplace if needed or use a tablet.

I plan to use this room as a gathering place for a few friends/family to sit and talk sit. I would also use room to read or relax in my free time.

My home was built in the early 1900's the house is pretty traditional. I have very high ceilings (12 ft) and very tall windows (6ft.) Windows are just normal double hung windows. My fireplace is dark Mahogany wood (very similar fireplace photo attached)

Stairs are also traditional/colonial- dark hardwood floor on stair treads and white risers. (Very similar Staircase photo attached below- I do not have wainscoting though)

I would add a couch under the window and two chairs across from it.

This room is definitely a challenge! I think you could use 4 chairs around a coffee table. I'd place two chairs facing the fireplace and the other two facing them in front of the bookcases, basically floating in the center of the room. This arrangement works nicely for a sitting room--I've done it three times now for clients, and they all love it. Just don't use very large chairs--30-33" wide would be the largest. Then anchor the seating area with an area rug.