A layout similar to below would work. A sofa facing the fireplace with a pair of chairs on both ends of the fireplace. I would also add a sofa table to the back of the sofa as it is so close to your entry. It would help create some division between the living and entry. Good luck! [Console[(https://www.houzz.com/products/global-views-grand-hall-console-table-large-prvw-vr~14725249?lid=5582843)

What can you change and what is your budget?

Place the longer sofa facing the TV. It makes the most sense for viewing the TV. I would place a console behind the sofa with its back to what i assume is the entrance. Place the two slipper chairs side by side where the sofa is in front of the window .

I agree with CDR's thoughts on furniture placement. You could use a linear electric fireplace like this with the t.v. mounted above it. I think they're much nicer looking than something with a mantle. It's clean and modern looking. Just be sure the fireplace is longer than the t.v. or it will look out of balance. If you put a sofa table behind the sofa in the bay window, it will keep the sofa pulled away from the baseboard heaters well enough for the heat to circulate. Then you can add a couple of lamps for ambient lighting. Two chairs (swivel are nice for going between conversation and t.v. watching) with a table between them for drinks and an area rug to pull it all together. You'll want to add art where the candle holder is on the wall I think, to add some life and color to the space. Keep the furniture smaller and with feet so it doesn't overwhelm the smaller space.