There's a lot of space devoted to circulation, and the in-law suite looks almost as large as the regular living space. I think it's possible to do better. I don't know what that space is opposite the entry, but I certainly wouldn't want to enter the house (or have my guests enter the house), and the first thing they see is whatever is in that room. If it was my house I would at least put the entry to that space opposite the stairs, and use the solid wall opposite the entry for display, built-in shelving and appropriate lighting. I think you can do better than this...

I need to get myself off craigslist and fbook buy/sell groups! I love getting a deal and I love reusing stuff. I think I just figured out why my house looks like a mish mash. Check out this sofa. It's a Hancock and Moore in a taupe color. 1100 used seems like a crazy high price, but I know the brand is $$$$ and quality. I think we are going to have to take a break from taking out floorboards to go have a look. My hubs will love that idea. :)

I've got a two ideas. Both involve extending the kitchen into the eating area, moving the back door over to the current dining area, and making the living room the family room. 1. Extend the kitchen into the eating area and move back door. Next, I would consider turning your family room into the dining room. If you put a larger but still casual table then it can be used for normal nights and dressed up for the holidays with a nice tablecloth. The fireplace can stay or be taken out at your discretion. I don't think it would impede anything though. Then open up the casement between the current dining room and the living room I would make one larger great room with the tv over the fireplace. I know you said that most of the kids activities and tv watching is done downstairs, so this area could be kept fairly neat. Also, this might not be in the budget, but if you did do one big great room, you could always try and get another half bath in there. I would put this by the kitchen as there is plumbing on that wall already. This way guests don't have to walk through the mudroom/laundry or go upstairs to use the bathroom. It depends on if you and your family want a formal living room and dining room though. 2. The other option that would flip things around even more would be to move the formal living room to the den and make the current family room a den. (you didn't provide a picture, so idk what exactly you use the den for). This way though it could still be a place to sit and chill near the kitchen. Then like option 1. have the kitchen go into the eating area and you could do your peninsula with stools as well. The dining room stays the dining room but do what I recommended in option 1. and get a larger but casual table. The living room would become the family room, also the same as in option 1 and if you can fit a half bath somewhere that would work probably be nice as well.

A couple of things for sure IMO a walk in pantry is a huge waste of space and when it is not in the work area even worse. I am not really getting a feel for the spaces I usually do not like kitchens open to LRS but to DRs yes. The 2 levels will be an issue and before planning to make these all one level think it through a lot. Every window doorway plumbing all will need to be redone . You seem to have a lot of sq footage but not used very well. The kitchen is tiny and IMO you could have a LR and DR in that large LR space that would allow for a much bigger kitchen. That large window is fabulous but it needs to be a new one where the bottom is 42” from the floor then you can install cabinets all along that wall eliminate the walk in pantry and make the space on the right your DR a wall of fridge and pullout pantries on the right kitchen wall have the island longer and positioned to face that great window. You really need a good interior designer to use this space to the best advantage . Make sure you also get an independant kitchen designer .