geokid, that is actually what I think my husband and I will be doing! What a coincidence! Over the weekend, we tried almost all the layouts suggested (much to my husband and everyone who had to help's horror), even went back and forth a few times, and have settled on two arrangements that will work best for us. In either arrangement, the sofa is going to face the fireplace. We'll have two slimmer side chairs with a opposite from the sofa. We most likely will have the TV mounted on the long wall with a smaller cabinet or mounted cubbies/shelves (something) for the electronics. I might add in a small tufted bench opposite the TV if we need more seating, but the two side chairs should work for now, and when my family/friends come over to play video games (which seems to be really often lately), we'll pull the chairs over. But realistically, we all sit on the floor. The piano will stay along the stairs, and to balance the open wall space between the piano and the sofa, we'll mount some shelves for decor and books. We tried mounting the TV over the fireplace, and I surprisingly liked it, too! It totally cleared up the floor space and made everything so open, but...it was kind of uncomfortable to look up at the TV. I'm only 5'3"; I don't mind a few minutes like that, but not for a couple of hours and not for game-playing. It's fine for my husband, though. I'm still keeping this an option, as I think we won't really know what'll work for us until we start buying some new furniture. I tried placing the piano in the dining room; no good because it ate up too much room. The bookcases are currently there, and I kind of like it! LOL. We have no dining table yet, so it feels like a special reading room. Haha! I like the idea of the bench along the window. If our chandelier was centered in the room, would it look weird for the table to be off-center? Otherwise, my plan was to buy a narrow table, have bench seating on one side (probably closer to the bar area) and regular chairs the other side.

I was at a friend's house and they had a built in similar to yours. They had the TV on a sliding shelf in the built in and pulled it forward for viewing , but then had the option of pushing it back all the way and actually had doors that shut to hide it. That may be overkill to close doors to hide the TV, but it looks like you could have a retractable shelf in your built in for the TV. Can you do without the loveseat in the room? I think the loveseat interrupts your flow into the room, both physicially and visually. Instead, how about moving the chaise where the loveseat is and maybe getting a nice upholstered swivel chair to put over on the fireplace side which could be turned to face the TV or the fireplace. It could be placed close to the couch and angled in so it doesn't block the fireplace. Or, if you aren't set on having a chaise, an upholstered swivel chair could be placed on either side of the couch-nothing too big. That would leave the entryway less blocked. I think that would made the room look larger. I really like to look into a room and see an unblocked expanse of floor all the way to the other end, if possible. With a chair on either side of the couch with a small table between each chair and the couch, you'd only lose one seat from what you have now. If you really want something to recline in, consider a smallish lazyboy for one of the side chairs. We love our leather lazyboys. Also, I would move the grouping as far back toward the breakfast nook as possible. I love the built ins, the fireplace and the glass doors out to the deck. It's going to be lovely when it's all furnished.

Good points by @Toronto. Other considerations. - People who get gas often wish that they'd gone with a traditional wood burning (perhaps w/ a gas starter). - There is a wide variation in inserts (assuming you're not doing full masonry). Some draw (burn better, no smoke) better than others. Some sound hollow and make noises when they heat up and expand. Kits like Isokern are good for these points. - Fireplaces can be energy inefficient. Make sure you can close it up well, particularly if you live in a wintery climate. - We had a timer switch installed for our MUA so that we can turn it on manually just before starting a fire and have it run for about 1 hr. Many benefits so we're doing the same on our new house. - We chose not to do separate living & family rooms. So, we'll have a 60" TV in a cabinet next to our fireplace. In addition we'll have a screen that can roll down over the fireplace w/ a laser projector when we want to use the space as more of a theatre. I was in film production for a number of years and image quality is important to us. I expect this will work well and completely disagree with @Patricia Colwell.

Location: a safe place to be. If you can't afford your dream city, at least find a city you can be safely outside, in..... Take care of your family and put 2 bedrooms at least downstairs. You can make one an office when the empty nest sets in...you get an office, till you have inlaws/grandkids, or live in help to recuperate from 'knee surgery/hip surgery...etc. The 2nd bedroom can have a full bath just off the living area, that works as a powder room or a public convenient bathroom...make the doors 3 ft wide, keep the vanity separate with a pocket door to the toilet/bath/shower area...than you have the equivalent of 2 bathrooms for guests ! Also, put a sink in your utility area. And don't put in so many cabinets that you have to remove some when you go from chest to upright deep freezer. Leave some places as flex. Open shelves are easier to remove than cabinets hung on that wall, btw..... Make your refrigerator convenient to someone coming in from the backyard through the utility room.. Keeps them out of your kitchen when you're cooking. Make your dining room/living room one area at least 13 feet wide and 24 to 30 feet long. Sometimes adults just need a place to visit without the television the kids are watching. A dining room or a 'living room' is nice, if you just put in one....No need to build walls for each area, you can buy lots of pretty ways to differentiate the two. Don't fall for the recessed lighting throughout the house. So much labor to install and so many places to leak energy and bulbs to change. Choose light fixtures that provide adaquate light for the task in the area. Keep your rooms in balance. You don't need a 300 sq foot bath if the other baths are 1/5th that size. You don't need a 25x25 Master bedroom, if your kitchen is 10x11..Consider how many people will be in one space at one time, to help you. Best of all, build something you can pay for in less than 15 years. Alot of those decisions are made in the last 30pct of home building. Keep your numbers straight, and if you must have high end, get it on sale. The cheapest thing you can do is 'put a house in the dry'. It's how you finish it that will kill your budget, so don't put too many square feet under the roof, --unless you have a couple of places you can finish after the house is home for a few years.