I would leave the walls white. Since you are on a budget my advice would be to edit your furnishings down and rearranging the stuff you have. If this was my space: I would move the dining room table out from the wall. It looks like you have enough space to float it in the dining room. You aren't using the woodstove at the moment right. Does the high chair fit into the space between the woodstove and wall? If so I would store the chair there. Put a pretty washable tablecloth on the table. Ebay has some great/cheap vintage ones. Then add a mason jar or large jar full of wildflowers on the table. Could you move the cabinet with the bread drawer out of the kitchen and put it in between the door and window where the dining table was? Would there be enough space? If so I would then ask dh to help me put up some basic white shelves in that space for storage. Move the garbage can back and that white rectangle (is that a fridge?) underneath. Reorganizing and decluttering the kitchen would really open that space up making it more functional. You could store the pantry type items in the cabinets and move your dishes out where they could be seen on the shelves for a clean modern country look. Where does that door lead in the living room? Is there anyplace you could move that wonderful china cabinet. I would move it to another room or upstair's and use it in a new way. Storing linen in a hallway or craft/office supplies in a rooom, etc. Store the china in the cabinet in the hutch that used to be in the kitchen that is now in the dining room. I think the idea of using quilts is a brillant one and I would put it in the area where the china cabinet was. Take the frames off the walls and repurpose the small bookcase and table in the middle of the room into other rooms. Again not sure of proportions but I would move the couch where the love seat is and the love seat where the recliner is and the recliner by the window where the couch was. Adding lots of large basics for toys and clutter. You have a lovely home. Can't wait to see what you do.

You would want to place the dining room next to the kitchen where it fits logically. To shorten the space, I would recommend two colorful area rugs to define the dining area and the living area, which will give life and warmth. Please don't fall into the gray/neutral groove which is a dying trend that many still falsely think is fashionable. With a colorful rug you can choose a couch and chairs that have pretty colors, not brown or black leather which will kill a room design. Straight, classic lines that won't become dated are best for your furniture because they look good with everything and won't look dated in 5 or 10 years.

I would stay away from a sectional and go with a sofa and 2 chairs not matching to the sofa. That DR is going to be a problem you will need to go very narrow with a table to work in an 8’ space or you will need to push a table against the wall and only pullout when you need toyou could do a 36 x 72 table that would sit 4 nicely without pulling out You have lots of places for TV in the LR . Do you need more storage or some display I would suggest a Besta sytem for a wall with the TV maybe on the right hand wall. The sofa facing the TV and a chair on either side with a nice coffee table that layout works well for conversation and much more comfortable seating than a sectional.

Art is so very personal, IMHO. I like the older Monet styles of art, but something bright and bold would bring an infusion of color. Do you like contemporary? Do you like abstract? Do you like impressionism? Is there someone local that speaks to you? Do you want people in your art? Try a poster from art.com because it can be cheaper and may help you. We have a Hyunah Kim and a Vassileva in our hall bathroom!! I have impressionists in our living and dining room and a TC Steele in our dining room. I also have some original art in the LR/DR. The others are posters. So, what I am saying is, art is very personal. You need to find some that speaks to you!!!