I would paint it all the same color and get rid of the curtains. Very distracting. I will let others who are good at furniture make suggestions but generally you need to divide up the space into 2 areas.

What is that structure underneath the curtains? Is it possible to have floor-length curtains in a color similar to the wall, although honestly that color doesn't do the room any favors. I would paint it the same color as the other wall, which will make the room look larger and more cohesive. . To make this room look comfortable at all you need an area rug or two. You need a coffee table and some side tables with table lamps because the lighting you have is terribly harsh and cold. Those chairs are not attractive, I'm sorry to say, but you can at least find some nice, colorful pillows to spiff them up. The black couch is puzzling too; it doesn't go with anything. Try pillows in nice colors there too.

I just went back and read that you're happy to change the furniture, Yes, please! I would not pick leather, and would choose lighter colors, preferably fabric. That wall and ceiling lighting has to go; it will make everyone look horrible and hurt your eyes. You need less bulky pieces of furniture. Try turning the couch toward the TV because I think you can see it from there, assuming there is enough room to get around the couch. This is a really awkward space. You definitely need pictures on the wall to brighten this room and area rugs, as mentioned.

Is that a heater under the window? Switch to some roman shades or bamboo roller blinds at least as wide as the heater and, if possible, hang floor-to-ceiling length curtains on each side of the window/heater. Paint the walls all the same color.

For the furniture, I would put the TV on the wall where the recliners are currently, place the couch at the other end of the room opposite the TV, float the loveseat facing the window, perhaps put the recliners on the window wall if they will fit, but if not, move them to the square area near the door to make a separate seating area.

You are trying to make two rooms into one. Imagine a wall separating the rooms and then creat a tv room in one space and a sitting room or computer room or reading room in the other space.

I believe the House was designed so this L shape was supposed to be a living room dining room combination.

As auntthelma and shari mention, this space should be divided into two areas. Below is a furniture arrangement to consider. Sectionals are a sore point for some, but I think one could work well here.

The area in the second picture, near the door, could be a sitting area for reading. Before the window a couple of comfortable club chairs facing a long and low bookshelf. The chairs could share a large-ish round ottoman, which could also be used for extra seating in a pinch. The seating area is grounded by an area rug. The bookshelf could be topped with a couple of lamps and some art. An small occasional chair, provides extra seating when needed.

The larger area could be the entertainment/TV lounge. This space is also grounded by an area rug. It should play nicely with the one in the sitting area. Tucked in the corner is a sectional. Above it is a hanging pendant light in the corner. Before the window are a couple of armchairs sharing an end table. Opposite the sectional is a media console.

You'll have to be sure to measure very carefully to get the right furniture sizes. Painter's tape on the floor is a great way to see what will fit. I hope this has been helpful. Good luck!