There is a rule in design that you can have three patterns as long as they are small, medium, and large. I chose this first rug because it brings in some subtle color and is a nice contrast to the dark furniture. The large pattern wont compete with the medium pattern on the chair. I selected this rug as the second option because of the very large pattern and the contrast between the furniture, while keeping in the same color family.

I would use the space off the kitchen like a family room with the T.V there . The other space like a nice LR for adult conversation and why would you want a brown sofa when there is already so much brown in the space.With 2 kids I would be looking at getting rid of the carpet and getting wood floors and I for sure would not have T.V. in both spaces. I hate TV in my LR use that nice big space for some seating , not a sectional, that is conducive conversationand I would probably add a fireplace in that large space for a focal point.

Realty photos are always a little stretched to make spaces seem larger, so it is difficult to get a sense of the room's scale. Is the front entrance in the stairwell area opposite the FP location? I'd say the light/wine rack area was originally designed as a dining area near the kitchen. Do you need to use it that way? For a family friendly corner, it could become the spot for a game/snack table or bookcases/rocker/reading lamp for baby time. Have the light moved or removed to your liking while you reno. You haven't mentioned or shown us your furniture, but a 3-seat sofa and two armchairs are a good foundation for any living room. These arrangements could work well around the FP, leaving the TV where they have itm as these are all swivel chairs. In the 4-chair group, you could do swivels only on the TV side of the grouping.

Congrats on the new place! If you can swing built ins with some cool lighting at the top and the shelving - thats my recommendation for the tv wall. If done right, it will be your best use of storage and is a stunner and will always get your money back if you plan on ever moving again. I would also recommend a new fan. I love your idea of getting some kind of window treatment - maybe do a fun but neutral pattern? Unless you're interested in adding a bit of bold - dark like a warm charcoal or deep brown - that might work with your ottoman. Is that staying? Stick with warm pallete to go with your existing stuff. Does the current furn layout work for you? I dont mind the style and sizes of what you have...but for sure a sectional would look better...as long as the flow works out...it seems like it should with your openings. Hope that helps!