My living room layout is very similar! I had my couch horizontal in front of your window creating a entryway, maybe put a console table behind the couch.

That really leaves you with the current arrangement, replacing the grey chair by the front window with kid stuff and leaving the floating living space opposite the TV. I'd really look into rerouting cable so the TV can be where the large art piece is. It's not usually very expensive and will be necessary in order to keep your walkway from running right in front of the tv.

@Gcubed Living room serves as a large comfy space when we have lots of friends over. I was also thinking of splitting the space so that 1/3 of the space is a conference table. We have a dining room in the back connected to the kitchen. There's two side doors, one that opens into the kitchen and the other is near the staircase. None of those have a closet/mudroom functions. The basement has an entrance and I was going to make that the mudroom entrance because of the dogs. My husband likes to enter from the sides. I like to enter through the front door and hang up things. It would also be the entrance for guests so that's why I wanted a coat closet. @Lidia - Something like this?

For the time being at least, leave the stone above the fireplace plain. If at some point in time in the future you find art you truly like, the you could add that ... but don't just look/settle for something there because you think you should want something there. Like recliners myself. Consider a pair of them. As long as you leave the walk path clear between front door and back of the house, how you define your sitting space as being separate from the walk space depends upon what works for you. A room sized rug would be worth considering and/or a long runner in the walk path might serve the purpose. You could invest in a couple waist high shelving units and put one on each side of the room with the back to the living/sitting area and the doors, whether glass or solid ... or even open shelves ... facing the entry hall. They'll need to be sized and weighted and/or secured to wall/floor so they'll not easily tip over so you could also add a lamp on each one. Think: upscale overhead kitchen cabinet with glass doors and finished board on top set atop a built base. #5 of 20 https://www.thespruce.com/ingenious-ikea-billy-bookcase-hacks-4006865 https://www.wayfair.com/furniture/pdp/sarreid-ltd-library-bookcase-rfd3082.html